VZCZCXRO6939
PP RUEHRG
DE RUEHBR #1826/01 2680947
ZNR UUUUU ZZH
P 250947Z SEP 07 ZDK
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 0028
INFO RUEHRG/AMCONSUL RECIFE 7161
RUEHRI/AMCONSUL RIO DE JANEIRO 5153
RUEHSO/AMCONSUL SAO PAULO 0857
RUEHBU/AMEMBASSY BUENOS AIRES 5016
RUEHAC/AMEMBASSY ASUNCION 6303
RUEHMN/AMEMBASSY MONTEVIDEO 7025
RUEHSG/AMEMBASSY SANTIAGO 6436
RUEHLP/AMEMBASSY LA PAZ 5640
RUEHWN/AMEMBASSY BRIDGETOWN 0066
RUEHPU/AMEMBASSY PORT AU PRINCE 0198
RUEHSN/AMEMBASSY SAN SALVADOR 0163
RUEHDG/AMEMBASSY SANTO DOMINGO 0175
RUEHME/AMEMBASSY MEXICO 2085
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC
RUEHRC/USDA FAS WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
UNCLAS SECTION 01 OF 03 BRASILIA 001826
SIPDIS
SENSITIVE
SIPDIS
STATE FOR WHA/BSC, WHA/EPSC, E, EEB
STATE FOR WHA/BSC AND WHA/EPSC FCORNEILLE, E FOR GMANUEL,
EEB/ESC/IEC FOR BHAENDLER
NSC FOR TOMASULO
USDOC FOR 4332/ITA/MAC/WH/OLAC
USDOC ALSO FOR 3134/USFCS
DOE FOR GARY WARD AND COURTNEY GILLESPIE
USAID FOR LAC/AA
E.O. 12958: N/A
TAGS: ECON ENRG EAGR BR
SUBJECT: BRAZIL: FIRST MEETING OF USG-GOB BIOFUELS STEERING
COMMITTEE
BRASILIA 00001826 001.5 OF 003
1. (SBU) Summary: Under Secretary for Economic, Energy and
Agricultural Affairs Reuben Jeffery III, Ambassador Sobel and
delegation participated in the first USG-GOB Biofuels Steering
Committee meeting on August 20, 2007. Ministry of Exterior
Relations (MRE) Under Secretary Everton Vargas led the Brazilian
delegation. Under Secretary Jeffery stressed the value of the
bilateral dialogue and the transformative opportunity that biofuels
represent, and said that he welcomed the opportunity to make
advances on specific areas of this dialogue. Both parties
emphasized the need to move quickly in the area of standardization
to enable future collaboration and make biofuels a global commodity.
Vargas highlighted the September visit by Brazilians officials to
U.S. Department of Energy research laboratories as an important
first step for information exchange. Under Secretary Jeffery
observed that cooperation should not be restricted to scientific
discussion, but should extend to defining actionable projects.
Ambassador Sobel suggested including other third counties that could
be significant building blocks for the future, such as Japan, India
or Mexico. Both under secretaries agreed on the need for private
sector involvement to spur momentum and keep pace with the market in
the biofuels race. Participants discussed the makeup of a proposed
advisory group and future meeting dates for the Steering Committee.
In a breakfast meeting on August 21, Alessandro Teixeira, President
of Brazil's Export Promotion Agency (APEX) stressed the need for
more immediate results. He recommended a dual strategy involving
private sector, parallel projects in order to accomplish results at
what he termed "faster than diplomatic speed." End Summary.
2. (U) During an August 20 meeting of the U.S. - Brazil Biofuels
Steering Committee in Brasilia, Under Secretary Jeffery pointed out
that highlighting the success of one country would encourage other
countries to commit, and suggested that the steering committee
initially focus on one or two countries for quick, tangible
progress, and then reach out to others. His counterpart at the
Brazilian Ministry of External Relations (MRE), Everton Vargas,
concurred with this suggestion and said he would like to see
concrete results from our MOU. The Under Secretary reported that a
consulting group, Winrock, had been contracted by the USG to conduct
feasibility studies in target countries. He highlighted the
importance of USG and GOB involvement in shaping Winrock's agenda in
terms of focus and resources. Vargas said that private investment
would be a key to the success of the biofuels initiated and said
Brazil's Export Promotion Agency (APEX) would be a key player.
---------------
Standardization
---------------
3. (U) International biofuels standards and norms were a key focus
of the discussions. Vargas pointed out that the International
Biofuels Forum (IBF) can send a very important signal to the world
on biofuels standards, as well as environmental issues. The
greatest contribution that the IBF could provide, he stated, is in
the area of technical standards and norms. The Under Secretary
concurred that establishing biofuels as a commodity with standards
in place is an important prerequisite to achieving mutual USG-GOB
objectives.
4. (U) The President of INMETRO, Brazil's equivalent to the U.S.'
National Institute for Standards and Technology (NIST), Prof. Joao
Herz da Jornada, said that his agency hoped to establish a common
database of standards - a set of reference materials of measuring
techniques - by year end. Jornada indicated that his organization
BRASILIA 00001826 002 OF 003
was moving ahead quickly, had met with NIST in July, and would be
going to Washington in September to brief Commerce Secretary
Gutierrez for his upcoming trip to Brazil for Commercial Dialogue
meetings. Vargas added that it is important to have a convergence
of standards that extend to large markets like China and India.
U.S. delegation members noted that the IBF (which represents around
95 percent of worldwide ethanol production and whose members include
India and China) shared this sense of urgency.
---------------------
Advisory Group Makeup
---------------------
5. (U) Vargas stated that the GOB felt that an advisory group is
important to further the MOU's goals and suggested that it meet
soon. He recommended that the composition be limited to eight
individuals, with the option to invite special guests as needed.
U/S Jeffery demurred on limiting the size of the group to only eight
individuals and said that the composition of the committee should
include a mixture of NGOs and private-sector, for-profit businesses,
with only one or two government members. Vargas asked for more time
to consider the level of participation of these sectors. Brazil, he
said, would not have difficulty designating people. After
considerable discussion, Vargas suggested deferring this
determination to a later date.
---------------
Future Meetings
---------------
6. (U) Vargas recommended that the next Steering Committee meeting
take place in early January, indicating that late November and
December are very busy months on his calendar. The Under Secretary
indicated his preference for a meeting in late October or early
November, followed by another in January, in order to keep up
momentum. Vargas indicated he would review this suggestion and
recommend a final working schedule in a few weeks. Vargas added
that the issue of biofuels had become the "highest priority in the
Brazilian government," and reiterated that his government wants to
enhance our bilateral partnership and provide a global example.
Ambassador Sobel suggested that the parties could meet via DVC when
it is not possible to meet in person. (Note: After the meeting,
Greg Manuel and Amb. Simoes prepared a joint statement which said
that the two sides would meet again both in late October/early
November and in January. The level of the meetings was left to be
determined. End Note.)
-------------------
Breakfast with APEX
-------------------
7. (SBU) At a breakfast the next morning with the Under Secretary
and Ambassador Sobel, APEX President Alessandro Teixeira, expressed
dissatisfaction with the rate of progress on projects pursuant to
the MOU, and advocated a dual or parallel-track approach, allowing
the private sector to move ahead quickly and not only within the
framework of the MOU. He and Ambassador Sobel discussed the next
"big picture prospect" as possibly being Mexico, because Mexican
President Calderon has advocated a 10 percent mix of ethanol which
would significantly increase that country's demand for the product.
Mexico will never be a large producer, said Teixeira, but could be a
large consumer, although it currently faces pressure from the
Mexican National Petroleum Company (Pemex) and the GOM Ministry of
BRASILIA 00001826 003 OF 003
Energy to stave off a policy change in the ethanol mix.
8. (U) This cable was cleared by Tom Pierce in E.
Sobel