SAO JOSE DOS CAMPOS, Brazil--U.S. aerospace company Boeing and Brazilian aircraft maker Embraer on Wednesday inaugurated a program to promote research on producing aviation biofuels.

The program will coordinate and, in some cases, finance research to produce more sustainable and environmentally friendly fuels, taking advantage of Brazil's experience in the area, said Boeing Latin America President Donna Hrinak.

"One big goal of this project is to ensure that we don't lose" Brazil's competitive advantage in this type of research, she said at the inauguration ceremony.

Brazil is the world's second-biggest producer of ethanol, after the U.S., and has the world's biggest fleet of cars that can run on both the alternative fuel and gasoline.

Sugar cane will be one of the feedstocks for research projects, but Brazil has other possible raw materials as well, said Mauro Kern, Embraer's executive vice president for engineering and technology, including algae, used cooking oil and a fruit called macauba that grows on some types of palm trees.

Boeing and Embraer executives declined to provide figures on how much money the program will have available to finance projects or to give details on potential projects. The Center will probably reach its first project agreement in the first half of this year, Mr. Kern said

Even with the current low price of oil, it makes sense to continue developing alternate sources of fuel because reducing carbon emissions is a long-term challenge, he added.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

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