VZCZCXRO9415
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHFR #4432 3101749
ZNR UUUUU ZZH
R 061749Z NOV 07
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 1025
RUEHRC/USDA FAS WASHDC
INFO RUCNMEM/EU MEMBER STATES
RUEHMRE/AMCONSUL MARSEILLE 1920
RUEHSR/AMCONSUL STRASBOURG 0501
RUEHGV/USMISSION GENEVA 2753
RHEHAAA/WHITE HOUSE WASHDC

UNCLAS PARIS 004432 
 
SIPDIS 
 
SIPDIS 
 
BRUSSELS PASS USEU FOR AGMINCOUNSELOR 
STATE FOR OES; EUR/ERA AND EB(SPIRNAK); 
STATE PASS USTR FOR MURPHY; 
USDA/OS/SHAPOURI; 
OCRA/CURTIS 
OGA/CHAUDRY, DOUVELIS 
FAA/YOUNG; 
EU POSTS PASS TO AGRICULTURE AND ECON 
GENEVA FOR USTR, ALSO AGRICULTURE 
 
E.O. 12958: N/A 
TAGS: EAGR SENV ETRD EU FR
 
SUBJECT: FRANCE QUESTIONS BIOFUEL SUSTAINABILITY 
 
 
¶1.  In announcing the conclusions of the "Grenelle of the 
Environment" on October 25, President Sarkozy said that in France, 
the development of biofuels will be reassessed. He specifically 
targeted first generation biofuels (produced from food and feed 
crops) and suggested that a priority should be given instead to 
second generation biofuels, i.e. plant-derived fuels such as 
cellulosic ethanol. 
 
¶2.  On October 26, Minister for Ecology and Sustainable Development 
Jean Louis Borloo reaffirmed Sarkozy's position. France will 
maintain its goal of 7 percent use of biofuels in fossil fuels by 
¶2010. However, with the recent hike in commodity prices, France will 
reassess the feasibility of the 10% percent mandatory use of 
biofuels by 2015. The French Energy and Environment Agency (ADEME) 
will be tasked with assessing the ecological impact of biofuel 
production from food and feed crops. In the meantime, public 
research organizations will increase R&D on biomass biofuels, 
including plant-derived fuels. 
 
¶3.  Unlike farmers' association, French environmental associations 
and consumers organizations have been very critical of the French 
biofuel program. They were disappointed by Borloo's announcement, 
hoping that the GOF would lower its 2010 biofuel goals and reduce 
its tax credit commitments for the production of 700,000 MT of 
biodiesel and 250,000 MT of ethanol. At the same time, farm groups, 
especially arable crop associations, have expressed concern that GOF 
support for first generation biofuel production is diminishing. 
 
¶4. Comment : This is the first time the GOF  has officially 
questioned the viability of its biofuel programs. While most 
economists have not linked the hike in wheat prices to French 
biofuel programs, media and the general public have blamed ethanol 
production as one of the factors accounting for higher bread prices. 
In any case, continuous high commodity prices could seriously hamper 
the economic viability of French biofuel production in the future, 
despite record oil prices. At least, one major ethanol project has 
already been postponed, officially for technical reasons. However, 
as the volume of wheat used in ethanol production is still limited, 
a shift in the GOF position will have no direct impact on French 
wheat availability for either domestic uses and exports. Embassy 
will continue to stress to our GOF contacts the importance of 
biofuel production and research in the fight against climate change 
and the enhancement of energy security. 
 
Stapleton