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UNCLAS SECTION 01 OF 03 BRASILIA 001934 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR GMANUEL AND JMIOTKE 
PLEASE PASS TO DOE SLADISLAW AND KFREDRIKSEN 
 
E.O. 12958: N/A 
TAGS: TRGY SENV ENRG KSCA ETRD EAGR BR
SUBJECT: ETHANOL FORUM - PREPARATORY MEETING OUTCOMES 
 
 
BRASILIA 00001934  001.2 OF 003 
 
 
¶1. (U) Summary: Brazil hosted the first preparatory meeting to the 
Ethanol Forum on September 5 in Brasilia.  Five delegations attended 
including India, South Africa, China, the EU, the U.S. and Brazil. 
The USG delegation was headed by State's Greg Manuel and included 
Sarah Ladislaw from the Department of Energy, Morgan Perkins of USDA 
and Matthew Golden from Embassy Brasilia.  The Forum acted as a 
reaffirmation of the delegations' desire to facilitate, in a yet to 
be defined manner, an international biofuel market and provided a 
platform from which to begin its work.  Upon concluding, the 
delegations unanimously agreed to meet again before the end of the 
year and U/S Patriota, chairing the meeting for the GoB, assigned a 
set of tasks which each country should complete by October 30. End 
Summary 
 
¶2. (U) The GoB hosted the first preparatory meeting of the Ethanol 
Forum on September 5 at the Itamaraty Palace in Brasilia, Brazil. 
U/S Patriota of the Brazilian MFA hosted the meeting on behalf of 
Tereza Campello, a member of the Casa Civil and Dilma Rousseff's 
deputy Chief of Staff.  Patriota opened by emphasizing the 
intergovernmental nature of the proceedings and the benefits of 
ethanol, including environmental friendliness, third-world 
development, energy security and job creation.  He also made clear 
that Brazil's objective in creating the Ethanol Forum is not to sell 
anything, but to promote an idea.  Moreover, he identified as the 
underlying driver for this forum, the GoB belief that an 
international market for ethanol would not develop as expeditiously 
as the GoB would like without government intervention.  True to its 
free-form beginnings, Patriota clarified that the GoB had no view on 
how to structure the debate except to bring together producers and 
consumers to promote economic expansion and map a path to make 
biofuels available on a global scale.  The meeting produced neither 
minutes nor a statement.  The ultimate goal was to have each of the 
parties present their views on the subject and agree to meet again 
before the end of the year. 
 
¶3. (U) In opening the debate, the Casa Civil's Tereza Campello and 
Ricardo Dornelles of the Ministry of Mines and Energy each gave 
brief presentations outlining Brazil's current biofuel outlook from 
a political and technical standpoint.  Campello highlighted that the 
Forum is key to Brazil's energy strategy and that an 
interministerial group composed of the Ministries of Agriculture, 
Science and Technology, Mines and Energy and External Relations was 
created to discuss the issue.  It is important to note that Dilma 
Rousseff and the Casa Civil are and will continue running Brazil's 
biofuel/ethanol strategy.  Dornelles, for his part gave a view of 
Brazil's biofuel matrix, emphasizing Ethanol, Biodiesel and H-Bio. 
The GoB's current energy policy is to guarantee internal supply of 
ethanol, stimulate private investment, provide a tax model to 
promote increased use and production, and to maintain free prices 
throughout the production and supply chain. 
 
¶4. (U) Following this overview, Patriota proffered four questions 
with which to structure the discussion: 1) In which way can our 
governments cooperate to create an international market for biofuels 
taking into consideration environmental and food security aspects; 
2) What should be the scope of an intergovernmental partnership to 
promote an international market for ethanol; 3) Which are the core 
elements of a common agenda; 4)Agreement on a date and venue of an 
additional meeting (before the end of 2006) to pursue further 
dialogue.  Minister Antonio Simoes, director of the MFA's Energy 
Division, opened the dialogue. 
 
¶5. (U) Simoes posited that each of the representatives needed to 
think about production to ensure adequate supply of fuel, while 
taking into account environmental and food security.  He reiterated 
the concept that Brazil is promoting an idea on renewable fuels and 
not trying to sell anything.  Noting each country's unique 
environment and experience he emphasized the need to democratize the 
production process and create more producers, making money available 
to help developing countries via AID agencies, technical assistance 
bilateral and trilateral means.  He also highlighted the GoB desire 
to focus on rules and regulations and to define concrete standards. 
In terms of the intergovernmental scope, Brazil would like to work 
on this project bilaterally, trilaterally, and plurilaterally 
(through multiple governments outside the fora of the UN).  Finally, 
the GoB deems an ideal core agenda to include an analysis of ethanol 
production aspects, its current and potential use as a fuel and a 
presentation of perspectives of promoting ethanol in an 
international market. 
 
BRASILIA 00001934  002.2 OF 003 
 
 
 
¶6. (U) The EU represented by Ambassador Pacheco followed, agreeing 
to the concept of an ethanol forum and to the commoditization of 
ethanol.  The EU reiterated the need to discuss technological 
standards and proposed that the conference adopt a more holistic 
Biofuel Forum.  This would, according to Pacheco, more adequately 
address the unique situation in a variety of countries/regions.  In 
closing, the Ambassador added that the EU will host an international 
Biofuel Conference in early 2007 (invitations will be sent shortly) 
and will also host a more technical conference in January of 07 to 
discuss biofuel technical standards. 
 
¶7. (U) India, represented by Ambassador Puri welcomed the initiative 
as timely and overdue.  He underscored the need to shore up ethanol 
supplies, noting that while India produces nearly as much sugar as 
Brazil, it needs to import additional sugar to support its immense 
population.  Puri proffered that the principal mechanism to affect 
public policy change on a global scale is to make raw materials 
available.  Under core concepts, India agreed with the EU proposal 
to expand the focus of the forum from ethanol to biofuels. 
 
¶8. (U) The South African delegation, led by Ambassador Zulu, 
declared itself a nation with a biofuels program in its infancy.  As 
its program develops, South Africa's principal concern will be to 
ensure that biofuel development is somehow tied into food security, 
and the delegation emphasized the import of creating ethanol from 
food sources.  South Africa also recommended focusing on the 
electricity generating potential of biofuels and the need to 
harmonize standards in order to facilitate increased trade.  The 
delegation asserted that the Forum's core concepts must include 
sustainable production and job creation in developing countries.  It 
also underlined the need to evaluate current biofuel endeavors so as 
to not duplicate existing efforts. 
 
¶9. (U) China, for its part, agreed verbatim to the talking points 
set forth by the GoB and Simoes, agreed to expand the breadth of the 
Forum to include biofuels and agreed to cooperate with the consensus 
decision regarding a time to meet before the end of the year. 
 
¶10. (U) Greg Manuel rounded out the discussion elaborating on the 
USG's two key principals: 1) any cooperation that promotes 
production and consumption benefits collective interests and 2) the 
private sector should be involved in the discussion early and often. 
 He posited that the immense economic opportunity represented by 
biofuels mean that the private sector will be the natural engine 
driving the globalization of the product.  Manuel underscored this, 
alluding to the fact that the private sector in the U.S. is 
responsible for the large majority of investment into biofuels.  He 
also emphasized tool sets with which the collective could obtain the 
Ethanol Forum's goal.  The USG perspective is that governments 
should play a strong role in orienting and assembling public and 
private institutions toward production and consumption, and should 
utilize diplomatic persuasion and foreign assistance to assist 
transitional economies via development assistance, technology 
transfer, etc. 
 
¶11. (U) Following the aforementioned comments, Patriota stepped back 
into the fray.  Noting the convergence of body as a whole, he 
suggested holding the next meeting in the second half of November. 
He also presented the delegations with a list of taskers to finish 
by October 30.  Itamaraty's Energy Division will act as a clearing 
house for the collection and dissemination of the aggregate data. 
The tasks include creating a 5-6 page paper outlining each 
delegation's view of intergovernmental action especially in light of 
the USG view that future modalities should include the private 
sector.  Other tasks include mapping current research to avoid 
repetition, drawing up a survey of national and international 
institutions relevant to the discussion (generating resources for 
country development), and outlining each countries own structure and 
procedure in dealing with biofuels: i.e. who generates policy, 
responsible for execution. 
 
¶12. (SBU) Comment: Brazil's own internal debate or struggle to 
formulate policy was the most salient factor to come out of this 
meeting.  From U/S Patriota's deferential treatment of the Casa 
Civil's Campello, to his allusion that a policy shake-up is due, it 
is clear that Dilma Rousseff and the Casa Civil are in charge 
Brazil's biofuel policy.  It is also obvious that the exact nature 
of the GoB's biofuel executing mechanism is not yet certain. 
 
BRASILIA 00001934  003.2 OF 003 
 
 
Patriota was unwilling to divulge Brazil's organic make-up noting 
that Brazil is still deciding how to organize and noting that a 
change is likely following Brazil's October election. 
 
¶13. (SBU) On a whole, the meeting produced no substance.  It did, 
however, provide a backdrop for the USG to present its views on the 
Forum; most importantly, the necessary role that the private sector 
needs to play in its development.  It also proved that, at least 
initially, tariff and trade would not be incorporated into the 
Forum's substantive discussions.  In a side conversation with 
Patriota and Simoes, the USG expressed concern about the existence 
of two international biofuel forums, GBEP and Brazil's Ethanol 
Forum.  The USG stressed the need for Brazil to find a way to 
reconcile the two groups in terms of scope and purpose, perhaps by 
talking with the Italians.  Otherwise, the USG would have difficulty 
participating in the Ethanol Forum. The ultimate achievements of the 
meeting were the universal agreement that the Ethanol Forum should 
include biofuels, opening more doors to develop regions unsuitable 
for ethanol production and greater private sector participation, and 
the decision to meet prior to the end of the year. End Comment 
 
SOBEL