I just received word that Amyris has now officially announced a partnership to use Brazilian sugar cane to produce biofuels.  Amyris and Crystalsev are aiming to hit the market with cane-derived biodiesel in 2010.  This deal has been in the works for a while; the press release is here.

Amyris now has access to large amounts of sugar, as well as substantial fermentation capacity, and they need to get their bugs up to snuff for producing large volumes of fuel.  Based on what I have seen in my travels, I expect they will get there.  In principle, the market will be the ultimate judge of the accomplishment, with consumers in the role of jury.  But the market, at present, is also skewed by subsidies and tariffs that place Brazilian products at a disadvantage compared to less efficient domestic production.  It is yet unclear whether the new biofuel will be subject to the same uneven playing field facing Brazilian ethanol.

(Update:  Since this post seems to be getting lots of traffic, I will point those interested to a couple of my earlier posts on the role of Amyris and synthetic biology in producing biofuels: "The Intersection of Biofuels and Synthetic Biology", and "The Need for Fuels Produced Using Synthetic Biology".)