VZCZCXRO3379
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #1242/01 1780157
ZNR UUUUU ZZH
R 260157Z JUN 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 9386
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBK/AMEMBASSY BANGKOK 8466
RUEHBR/AMEMBASSY BRASILIA 0211
RUEHSO/AMCONSUL SAO PAULO 0009
RUEHRI/AMCONSUL RIO DE JANEIRO
RUEHKO/AMEMBASSY TOKYO 2140
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHRC/USDA FAS WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 001242 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR U/S MCCORMICK 
OES FOR A/S MCMURRAY 
DEPT FOR OES/ENRC, EAP/MTS, EAP/RSP 
USAID FOR ANE, EGAT 
BANGKOK FOR RDM/A 
NSC FOR CEQ CONNAUGHTON, VAN DYKE 
 
E.O. 12958: N/A 
TAGS: EAGR EAID ENRG KGHG SENV PGOV ID BR
SUBJECT: G8 OPPORTUNITY FOR US-BRAZIL-INDONESIA BIOFUELS 
COLLABORATION 
 
¶1. (SBU) Summary.  President Lula of Brazil will be signing a 
biofuels Memorandum of Understanding (MOU) with Indonesia on July 
12, according to Brazilian Embassy contacts at an informal 
discussion hosted by Ambassador Hume.  Participants noted that the 
upcoming G8 Summit in Japan provides an opportune moment for 
Presidents Bush, Yudhoyono, and Lula to discuss the potential for 
collaboration on environmental issues, in particular biofuels, and 
pointed out that one initial step could be a trilateral 
U.S.-Brazil-Indonesia MOU on biofuels.  They also agreed on the 
importance of the Clean Technology Fund (CTF) for a country like 
Indonesia.  End Summary. 
 
¶2. (SBU) Ambassador Hume hosted a meeting on June 23 to informally 
discuss possible areas for cooperation between the U.S., Indonesia, 
and Brazil on the environment, particularly biofuels.  Participants 
included Edmundo Fujita, Ambassador of Brazil, Arifin Panigoro, 
Chairman of Indonesian power generation company MedcoEnergi, Jatna 
Supriatna, Executive Director of Conservation 
International-Indonesia, and Agus Sari, EcoSecurities Country 
Director. 
 
¶3. (SBU) Ambassador Fujita confirmed that President Luiz Inacio Lula 
da Silva will sign a bilateral MOU on Biofuels when he visits 
Jakarta on July 12, following the July 7-9 G8 Summit.  During his 
visit (as well as at the G8 Summit), President Lula's agenda will 
focus on climate change, environment, energy, agriculture, and 
sustainable development.  Brazil's interest in cooperating with 
Indonesia lies in promoting efforts to identify common standards and 
codes for a global biofuels market and making ethanol and other 
biofuels an internationally-accepted commodity.  Brazil views 
cooperation with Indonesia as strategically important in this effort 
and the MOU will serve as a framework for collaboration.  Fujita 
also pointed specifically to Brazil's interest in helping Indonesia 
improve the efficiency of sugar production from sugarcane and to 
produce "clean" electricity from bagasse.  He referenced potential 
research and training collaboration between Brazilian universities 
and research agencies, such as the Brazilian Agricultural Research 
Corporation (Embrapa), and Indonesian institutions. 
 
¶4. (SBU) Arifin Panigoro told the participants that Indonesian 
President Yudhoyono and Finance Minister Sri Mulyani, in private 
conversations with him, have indicated a strong interest in pursuing 
the CTF, in the context of clean energy generation and biofuels 
development, at the G8 Summit next month.  Ambassador Fujita and the 
others agreed on the importance of the CTF for Indonesia.  Panigoro 
also said that Japanese companies like Mitsubishi and Mitsui are 
very interested in biofuels and looking at infrastructure 
development opportunities in Indonesia.  He cited strong Government 
of Japan interest in providing assistance towards biofuels 
production and supporting infrastructure.  Although there are 
differences between biodiesel from palm oil (of which Indonesia is 
the world's largest producer) and ethanol from sugarcane, the 
attendees saw significant overlap and pointed to domestic Indonesian 
interest in increasing sugarcane and ethanol production. 
 
¶5. (SBU) The participants felt that this conversation was 
particularly timely because of the upcoming G8 Summit environment 
agenda and President Lula's visit to Indonesia.  As the U.S. 
increases its contribution to environmental programs in Indonesia 
and as Indonesia seeks alternative sources to meet its energy 
demands in a greener way, it is important that Indonesia can benefit 
from CTF financing. The participants agreed that collaboration 
between the three "Major Economies" of Indonesia, Brazil, and the 
U.S on areas of common interest and agreement, such as biofuels 
development and clean technology, could set a positive example for 
international cooperation on climate change.  Cooperation would also 
illustrate that there are alternatives to a preponderant focus on 
China and India in the climate change negotiations arena and, in 
fact, might influence China and India in a positive direction. 
 
¶6. (SBU) The participants concluded that the G8 Summit provides an 
opportune moment for Presidents Bush, Yudhoyono, and Lula to discuss 
the potential for further cooperation on environmental issues, 
 
JAKARTA 00001242  002 OF 002 
 
 
particularly biofuels.  A potential next step could be a trilateral 
U.S.-Brazil-Indonesia MOU on biofuels like our current bilateral MOU 
with Brazil, which includes three main pillars of cooperation: 1) 
increasing bilateral research cooperation; 2) assisting third 
countries to develop domestic biofuels capacity; and 3) cooperating 
multilaterally on identifying common standards and codes for a 
global biofuels market.  The $1 million grant that the U.S. 
Department of Energy (DOE) has with Conservation International for 
work on biofuels in Brazil and Indonesia provides a further basis to 
increased collaboration under a trilateral MOU. 
 
HUME