Brazilian aircraft maker Embraer and U.S. rival Boeing said Tuesday they will co-finance research to determine the sustainability of using Brazilian sugarcane in jet fuel.

The Inter-American Development Bank (IDB) will also contribute funds for the project aimed at reducing greenhouse emissions blamed for global warming, the three parties said in a joint statement.

"The groundbreaking study will evaluate environmental and market conditions associated with the use of renewable jet fuel," the partners said.

The fuel will be produced by U.S. firm Amyris, they said.

Arnaldo Vieira de Carvalho, leader of the IDB Sustainable Aviation Biofuels Initiative, said that emerging renewable jet fuel technologies have the potential to reduce greenhouse gas emissions "significantly," pointing to Brazil's success in using sugarcane ethanol to substitute for gasoline.

"This study will examine the overall potential for sustainable, large-scale production of alternative jet fuels made from sugarcane," he said.

The study, led by ICONE, a research think-tank in Brazil, is the first to be financed under an IDB grant announced in June to promote development of a sustainable bio-jet-fuels industry, the development bank said.

Environmental group World Wildlife Fund (WWF) is to serve as an independent reviewer and adviser.

Boeing said the collaborative research into the "cane-to-jet pathway" is important for diversifying aviation's fuel supplies, and also builds on strong U.S.-Brazil renewable energy cooperation.

"With aviation biofuel now approved for use in commercial jetliners, understanding and ensuring the sustainability of sources that can feed into region supply chains is critical and Brazil has a strong role to play there," said Billy Glover, Boeing vice president of environment and aviation policy.

"Our planet derives no benefit from a fuel that merely replaces current fossil fuels. This study will help us replace fossil fuels with a renewable jet fuel that surpasses both technical and sustainability criteria," said John Melo, chief executive of Amyris.

The California-based Amyris opened a sugar-based fuel facility in Brazil, in Campinas, in the southeastern state of Sao Paulo, in 2009.

Photograph: Participants look at a 100% ethanol powered aircraft made by Brazilian jet manufacturer Embraer. Photo by Mauricio Lima /AFP