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RUCPDOC/USDOC WASHDC
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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