U.S. planemaker Boeing Co and its Brazilian counterpart Embraer have joined forces to map out how best to expand the use of biofuels for jet engines from renewable sources such as sugar cane.

With the Sao Paulo State Scientific Research Federation (Fapesp), the two companies signed an agreement on Wednesday to construct a research center in Brazil that will study the infrastructure, transport and global marketing of biokerosene for the industry that has become increasingly sensitive to public attempts to brand it as an agent of global warming.

"This is not just a gesture. This is a serious investigation in what biofuels will be viable for this industry going forward," Boeing International Chief Executive Shep Hill said. "We chose Brazil because of its strengths in biomass and this type of fuel stock."

Brazil has a 30-year-plus history in large-scale commercial sugar cane biofuel production, distribution and marketing. It is also a major biodiesel producer from vegetable oils. Hill added, however, that Boeing was also involved in algae-based biofuel research in the Middle East and in jatropha-based research in Asia.

He stressed that biofuels had met all of the technical requirements of the highly demanding aviation fuel industry and jet engine makers, including GE , Rolls-Royce and others.

"We don't want feedstocks that are also food crops and we are only interested in developing a completely drop-in biofuel alternatives. We don't want any modifications required to the engines or planes," he said.

This particular requirement is a testament to how far commercial biofuels have advanced over the years. Companies such as California-based biotech firm Amyris are coming up with commercially viable ways to produce all sorts of fuels and chemical products from organic matter.

Hill said that Boeing did not plan to market any biokerosene in the future but it was interested in forming partners that would carry out that market function of buying and selling the green aviation fuel.

The partnership between the world's No. 1 and No. 3 aircraft manufacturers also highlights the commercial airline sector's interest in diversifying its fuel supply in the roughly 60 billion gallon-a-year aviation kerosene market, while reducing its carbon footprint as well.

"Actually, aviation only accounts for 2 percent of all carbon emission from the transport around the world, but we still want to lower that imprint, as citizens of the world. But especially, since there are people who blame the industry for more than that (share)," Hill said.

The American Society for Testing and Materials, which serves as a scientific standards body for the airline industry, has approved the use of up to 50 percent biokerosene in aviation.

The agreement between Boeing, Embraer and Fapesp will start with a nine-month gap study or road map on all of the potential feedstocks and their large-scale commercial challenges and advantages. This will then determine the capital and dimensions of the research center that will be built, Fapesp councilwoman Suely Vilela said.

"With all of the technical specifications of the biofuel resolved, the main question we will be looking to answer is 'what is the price point of the biofuel versus conventional aviation fuel?'" Hill said. "Demand is not a problem. It far outstrips supply at this point."

This may end up being a major obstacle. Brazil can't even produce sufficient cane ethanol supplies at present to come close to meeting demand from its flex-fuel car fleet that is growing bigger every month