Brazilian President Luiz Inacio Lula da Silva said today that his country's burgeoning ethanol business would not result in the deforestation of the Amazon rain forest.

The president's comments were intended to address concerns raised by E.U. and U.N. officials during his trip to Europe last week.

Silva said the Amazon rain forest's climate is unsuitable for the sugar cane used to produce ethanol and implied that unnamed foes were attempting to hinder Brazil's economic advancement.

"The Portuguese discovered a long time ago that the Amazon isn't a place to plant cane," Silva said. "The cartel of the world's powerful is trying to prevent Brazil from developing, trying to prevent Brazil from being transformed into a great nation."

Environmentalists have warned that the demand for ethanol could result in deforestation if trees are cleared to make room for crops. Some farmers are switching from growing soy to growing sugar cane, leading environmentalists to worry that soy farmers may move to the Amazon to grow their crops.

Silva also took aim at U.S. and European tariffs on Brazilian ethanol. "It's funny because they charge taxes on our ethanol, they charge on our biodiesel, but they don't charge for petroleum," he said.

Last year, Brazil produced 4.5 billion gallons of ethanol and exported 900 million gallons of the fuel. It is the second largest ethanol producer, behind the United States (Alan Clendenning, AP/Forbes, July 9). -- KB