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RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHFT #7767/01 3171550
ZNR UUUUU ZZH
R 131550Z NOV 06
FM AMCONSUL FRANKFURT
TO RUEHC/SECSTATE WASHDC 8425
INFO RUCPDOC/USDOC WASHDC
RUCNMEM/EU MEMBER STATES
RUCNFRG/FRG COLLECTIVE

UNCLAS SECTION 01 OF 02 FRANKFURT 007767 
 
SIPDIS 
 
PASS WHITE HOUSE FOR CEQ; State for E, G, EB, and OES 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ENRG ECON SENV GM
SUBJECT: GM Europe Working on Fuel Cell, Other New Transport 
Technologies; Notes Need for Common Standards 
 
 
Sensitive but Unclassified / Contains Business-Proprietary 
Information. 
 
¶1.  (SBU) SUMMARY:  General Motors Europe representatives, meeting 
with visiting Council on Environmental Quality (CEQ) Chairman James 
Connaughton, described the work being done in the facility to 
develop passenger vehicles powered by hydrogen fuel cells as well as 
work on intermediate technologies.  Points made in the presentations 
included the need for work with research institutions to develop 
answers to specific problems/aspects of the technology's development 
(rather than broad, conceptual research) and the necessity for 
governments, including the U.S. and the EU / EU member states, to 
create the regulatory environment essential to the development and 
marketing of such new vehicles.  Participants also noted that 
differences over regulations between the U.S. and the EU could 
hamper the development/sales of such new technologies in markets 
such as India and China where they could have a great positive 
environmental impact.  END SUMMARY. 
 
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Full-Scale Commercialization Still Ten Years Out 
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¶2.  (U) In an October 23 visit to the GM/Opel GM Fuel Cell 
Activities Center in Mainz-Kastel (near Frankfurt), White House 
Council on Environmental Quality Chairman James Connaughton was 
briefed on fuel cell vehicle development and biofuel developments by 
GM Europe (Opel) representatives.  Staff from CEQ, ConGen Frankfurt, 
and Embassy Berlin also participated in the meeting.  The Center 
integrates and tests GM's fuel cell vehicles (many of whose 
components are developed and produced in the United States).  NOTE: 
other GM fuel cell centers include Warren, MI (headquarters), 
Rochester, NY (fuel cells) and Torrance, CA (electric motors). 
 
¶3.  (SBU) Gherardo Corsini (GM Europe Director of Environmental 
Strategy and Regulation) described the company's progress towards 
environmentally sustainable vehicles -- ultimately hydrogen fuel 
cell cars, but only after first better gasoline/diesel internal 
combustion engines, then bio-fueled, and then hybrid engines. 
Corsini and Dr. Lars Peter Thiesen (Manager, Fuel Cell Development) 
said that full-scale commercialization is not likely before 2015 
despite aggressive efforts by GM -- its latest rollout this year is 
"Project Driveway" in whichone hundred Chevrlet Equinox SUVs, 
converted torun on hydrogen fuel cells, will be deployed in various 
cities (comprising the world's largest fuel cell fleet).  Fuel cells 
still face hurdles in terms of durability, safety, and 
affordability.  A related issue is the need for  the infrastructure 
to support hydrogen-powered vehicles, e.g., fuel and repair 
stations.  Connaughton commented that he had recently inaugurated 
hydrogen fuel stations in the U.S., a promising development. 
 
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Need to Consider Overall Impact and Commercial Viability 
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¶4.  (SBU) Opel reps commented that for the next ten to fifteen 
years, conventional and hybrid engines will be the key developments 
and therefore should be the focus of today's concerns.  Principles 
the company is observing in developing the new transport 
technologies: 
 
--  customer preferences; 
 
--  technology that can sell at a price customers are willing to 
pay; and 
 
--  do not focus on just one improvement, but rather on an overall 
positive impact. 
 
Expanding on this last point, regulators should not target fuel 
efficiency in a vacuum, the company officials argued.  Instead, they 
should consider consumer preferences and the commercial/technical 
limitations of new technology. 
 
¶5.  (SBU) As a result of this approach, GM prefers to focus new 
environmental technology in larger-sized vehicles - e.g., 
introducing hybrid technology in larger SUV's and other truck-based 
vehicles with "more bang for the buck" in terms of fuel savings. 
This approach is sometimes controversial among environmental 
activists who want to see only smaller vehicles on the road.  In 
fact, GM's "Urea" clean diesel technology requires a supplemental 
catalyst tank -- impractical for a small vehicle.  Putting it in a 
small vehicle would necessitate specialized refilling every few 
months.  The thinking in GM Europe is that the urea tank should only 
be refilled every 25,000 - 35,000 km. 
 
¶6.  (U) Connaughton agreed that whether diesel, bio-fuels, or 
 
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hybrids, governments should pursue integrated policies on 
transportation/ emissions rather than targeting only vehicle 
technology.  For instance, the U.S. and Europe have a symbiotic 
relationship on gasoline/diesel -- greater European diesel 
penetration complements the gasoline-centric U.S. market -- so a 
move towards more diesel vehicles in the U.S., while very 
advantageous for fuel efficiency, could put pressure on diesel fuel 
supplies worldwide. 
 
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Promoting Fuel Cell Cars: The Way Ahead 
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¶7.  (SBU) The GM Europe and CEQ reps compared notes on the USG's 
$1.2 billion/five-year fuel cell program versus the European Union's 
upcoming EUR 6.7 billion/ten-year program (of which half would come 
from private sources).  In Germany, development is focused on the 
Transport Energy Strategy (TES), a consortium including 
DaimlerChrysler, BMW, Volkswagen, MAN, Shell, ARAL, and RWE.  Funds 
come in roughly equal portions from industry and government, while 
research is carried out through private firms and public/private 
universities.  This differs from the U.S. approach in which national 
labs play a leading role. 
 
¶8.  (SBU) CEQ Chairman Connaughton asked whether current funding in 
Europe is "too much or too little" in terms of efficient 
utilization.  GM reps replied that, while there's always more 
research one might wish to do, in fact coordinating spending is the 
first priority.  General Motors and other large automakers are well 
placed to integrate fuel cell technology; basic research should 
focus instead on fundamental issues rather than rush towards 
integration or commercialization. 
 
¶9.  (SBU) GM reps commented that it is too early to regulate fuel 
cell cars -- the technology is too young -- but the U.S. and Europe 
ought to work now towards a regulatory regime that is integrated and 
not bifurcated (Connaughton agreed).  Standards should focus on 
performance/outcomes rather than on specific technologies which are 
subject to change.  Without a harmonization in standards, the 
technology's development and marketization will be stymied -- 
including in its sales to key third markets such as China and India. 
 Thus it is important that the U.S. and the EU find a way to accept 
or harmonize standards to reap the energy savings, energy security, 
and environmental/climate benefits of these new transportation 
technologies. 
 
¶10.  (U) This cable was cleared by CEQ subsequent to Chairman 
Connaughton's departure. 
 
POWELL