Shell International Petroleum has signed a non-binding memorandum of understanding with Brazilian bioethanol producer Cosan to form a $12bn joint venture (JV) that will enable the companies “to establish a scalable and profitable position in sustainable biofuels”. It covers the production of ethanol, sugar and power, and the supply, distribution and retail of transportation fuels. The JV aims to establish a market-leading position, and Shell cited Brazil, where the venture will be based, as the most efficient ethanol producing country in the world. The JV would have an initial annual production capacity of about 2 billion litres. Mark Williams, Royal Dutch Shell’s downstream director, said: “We see joining with Cosan as a way to grow the role of low-carbon, sustainable biofuels in the global transportation fuel mix. The joint venture would also enable Shell to set up a material and profitable biofuels business, with the potential to deploy next generation technologies.” The companies will now work towards finalising the agreement.