The Indy Racing League will use Brazilian ethanol in the 2009 season.
IRL President Terry Angstadt signed a memorandum of understanding with the Brazilian agency promoting biofuels on Monday, securing a supply of the alternative, agriculture-based fuel for all 23 races next year.
The announcement was made by Brazilian Presidential chief of staff Dilma Rousseff at the start of a five-day international conference on biofuels in Brazil.
The IRL has been racing with 100 percent ethanol fuel since 2007.
With the deal, Brazilian producers will supply part of the nearly 454,200 litres of ethanol used in the IRL season. The exact amount was not specified.
In exchange, Brazilian ethanol and other products will be promoted during the races.
"The (deal) is part of the strategy to promote the Brazilian biofuel as a clean and sustainable energy," said Alessandro Teixeira, president of the Brazilian Trade and Investment Promotion Agency.
Ethanol burns cleaner and produces better mileage, even though it results in less horsepower in the IRL cars.
Brazil is the second largest ethanol producer in the world after the United States, and is the largest exporter of the fuel.
Sugarcane-based ethanol is cheaper to produce than the corn-based ethanol made in the United States.