The Brazilian government plans to ban sugar cane plantations in environmentally sensitive areas.
The BBC reports there are concerns that Brazil's developing biofuels industry is increasing deforestation in the Amazon.
Plans issued by Environment Minister Carlos Minc would limit sugar cane plantations to 7.5% of Brazilian territory or 64 million hectares, and prevent the clearing of new land for the crop.
Building of ethanol distillation plants would also be prohibited in food-growing areas or in the vast wetlands of the Pantanal, on Brazil's border with Bolivia.
Brazil is the world's top producer of sugar.
The proposed legislation is expected to be put to Congress next year.