From: Reuters
Published February 4, 2008 02:49 PM

Mexico to issue permits for biofuel production

MEXICO CITY (Reuters) - Mexico said on Monday it will issue permits to companies for the first time to produce biofuels in a bid to cut emissions from cars and boost incomes for impoverished farmers.

The energy ministry said in a statement that companies will be allowed to produce ethanol and biodiesel, which can be used as additives in gasoline and diesel.

The government said in December it would encourage biodiesel production over ethanol because it would be hard for Mexican companies to compete against Brazil and the United States in ethanol production.

Ethanol is usually made from corn and sugar. Brazil is a world leader in sugar-based ethanol and the United States is the world's top corn producer.

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The agriculture ministry last month suggested farmers could grow beets, yucca root and sorghum for biodiesel production.

Critics say biofuel production hurts the poor as increased demand for crops drives up food prices.

(Reporting by Jason Lange; Editing by Christian Wiessner)

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