RIO DE JANEIRO, Dec. 6 (Reuters) – A United Nations panel has approved the inclusion of biofuels in a global scheme to reduce carbon emissions, a move that should boost investments in such projects, a Brazilian government official said on Friday.

''The United Nations has just approved liquid biofuels methodology as a basis for the CDM. Projects that include liquid biofuels for transport can be included,'' Andre Amado, the Brazilian Foreign Ministry's subsecretary for biofuels and technology, told Reuters in an interview.

The CDM, or Clean Development Mechanism, part of the UN's Kyoto protocol, promotes investments in emission-reducing projects in the developing world by companies and governments in rich nations.

In return for building wind farms or other projects, such investments can earn valuable carbon offsets, called certified emission reductions, that can be sold for profit or used to meet mandatory targets to cut emissions.

Brazil is the world's top sugar exporter and hopes to expand the export market for the ethanol biofuel it also makes from its sugar cane. Until now, though, biofuel for transport has not been covered by the CDM.

Amado, who will attend the UN summit on climate change in Copenhagen next week, said the decision to include biofuels should help boost global production of ethanol, something that Brazil sees as essential to forming a global market for it.

''With this, we will arrive in Copenhagen stronger,'' he said.

Brazil, where ethanol is widely used to fuel cars, has been spending hundreds of millions of dollars to fund the development of ethanol in several countries, including seven in Latin America and two in Africa.

It sees local ethanol production as essential to building a global export market because, without it, countries would be reluctant to switch to biofuels if they had reservations about the security of supplies.

Brazil's cane ethanol renders about seven times the energy used to produce it, an argument the country has used in defense of the controversial renewable fuel. It also points to its vast unused arable land to counter criticism that farm land should be used for food only.

Biofuels have been criticized by those who say they offer little more energy beyond that which is used to produce them.
But Brazil's sugar cane-based ethanol is much more efficient than the corn-based variety used by other countries, including the United States.

Amado said the Brazil delegation would argue strongly in Copenhagen for the expanded use of biofuels as a key way of reducing carbon emissions.

He said the use of so-called ''flex'' cars in Sao Paulo had saved 36 million tonnes of carbon dioxide between 2004 and 2008, equivalent to 113,000 trees.

''There is nothing comparable in the world in economic terms and that is what we will take to Copenhagen,'' he said.