Shell and Brazilian sugar-production group Cosan have announced they will be forming a joint biofuel laboratory venture, with the operation having an estimated value of $12 billion (£7.4 billion).
Agence France-Presse reports the entity, which is called Raizen, will produce around 580 million gallons of ethanol every year.
Chief executive of the venture Vasco Dias claimed it will promote sugar-cane ethanol as a "sustainable, clean and renewable source of energy", adding that Brazil's status as a biofuels powerhouse will also improve.
Around $1.6 billion is being brought to the table by Shell in terms of investment into the biofuel laboratory.
Raizen is set to have 23 mills for sugar cane crushing, which will be able to process around 62 million tonnes of the substance.
Earlier this month, Shell stated that while biofuels could become "a much more significant part of the energy mix", there is no cure-all for supply and demand tensions in the power sector.
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