Shell halts plans for "illegal" sugar cane

  • A biofuels company set up in Brazil by oil giant Shell has signed an agreement to give up plans to buy sugar cane grown on indigenous land.

    Raizen was sourcing some of the raw material for ethanol from farmers who had encroached on the land of the Guarani tribe in the state of Mato Grosso.

    The deal follows months of pressure by the Brazilian government and tribal leaders.

    Raizen was set up in 2010 as a multi-billion dollar joint venture between Shell and Brazilian ethanol company Cosan to produce ethanol from sugar cane.

    The company produces 2.2 billion liters of ethanol every year for export and for the Brazilian market.