VZCZCXRO0134
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #1240/01 3311053
ZNR UUUUU ZZH
R 261053Z NOV 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 5638
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHBS/USEU BRUSSELS
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEAEPA/HQ EPA WASHINGTON DC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RHEHAAA/WHITE HOUSE WASHDC

UNCLAS SECTION 01 OF 02 MADRID 001240 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/ERA MATTHEW BEH, OES/EGC DREW NELSON/BEN 
ZAITCHIK 
 
E.O. 12958: N/A 
TAGS: KGHG EAGR SENV ENRG TRGY EUN EU SP
SUBJECT: SPAIN OK WITH EU BIOFUELS LANGUAGE; SUPPORTS 
PASSING EU ENERGY & CLIMATE LEGISLATION IN 2008 
 
REF: A. SECSTATE 123492 
     ¶B. MADRID 1047 
 
¶1.  (SBU) SUMMARY. ESTHOFF reviewed reftel points on November 
25 with Hugo Lucas Porta, Secretary General of the 
International Relations Department at the GOS Institute for 
the Diversification and Development of Energy (IDAE).  In the 
recent past, Lucas has expressed skepticism of the proposed 
language being considered by the EU for mandatory 
sustainability and greenhouse gas emissions reduction 
criteria for biofuels (to be incorporated in implementing 
regulations for the Climate and Energy package) and the way 
in which it was being developed.  However, after 
participating in the legislative negotiating process with 
other EU Member States, Lucas is now comfortable that the 
final compromise on biofuels language within the Renewable 
Fuels Directive will contain sufficient flexibility to 
address GOS (and corresponding USG) concerns.  According to 
SecGen Lucas, the 'final compromise' language will not 
restrict trade or exclude U.S. corn ethanol, will provide 
industry with enough time to comply with the new 
requirements, and will be science-based.  He also emphasized 
that the European Commission (EC) will have the ability to 
make changes to the law if necessary, particularly as part of 
the scheduled legislative review in 2014.  The GOS' primary 
concern with the legislation is that its Revision Clause may 
encourage some Member States to not be fully committed to the 
package's requirements because of a perception that they can 
back out of their commitments after a compulsory review in 
¶2014.  Despite this concern, the SecGen is hopeful and 
expects that the EU Energy and Climate Legislation will be 
passed before the end of 2008.  END SUMMARY. 
 
------------------- 
Previous Skepticism 
------------------- 
 
¶2.  (SBU) In previous discussions with Post, Lucas has shared 
the USG's skepticism about the EU's proposed biofuels 
sustainability language and the motivations behind it.  In a 
meeting with USDA Under Secretary Dorr in September 2008, 
SecGen Lucas said he believed the biofuels sustainability 
requirements were politically motivated by the French EU 
Presidency and were not necessarily science-based.  He also 
said he believed that, at that point, the discussions in 
Brussels lacked the appropriate analysis of the effects on 
land use, biomass and biofuel production, and felt that more 
analysis was needed before implementing the biofuels 
standards. 
 
----------------- 
A Change of Heart 
----------------- 
 
¶3.  (SBU) However, despite his earlier skepticism, Lucas is 
now comfortable that the final compromise on biofuels 
language within the Renewable Fuels Directive will contain 
sufficient flexibility to address USG concerns.  SecGen Lucas 
is the lead GOS representative in Brussels responsible for 
negotiating the Spanish position on all EU legislation 
related to renewable energy.  He has participated throughout 
the process of developing the Renewable Fuels Directive and 
the Energy and Climate Legislation.  Lucas expects that the 
final compromise language between the EC, the Parliament and 
the Member States will not result in restrictions on trade or 
specific type of biofuels, particularly corn-based ethanol. 
He also shares the USG concern that industry should be 
provided sufficient time to adjust to the new requirements, 
and he believes that the legislation will allow this.  And 
Lucas believes that the language is sufficiently 
science-based.  For example, he referred to details of the 
legislation that recognize the need to protect biodiversity, 
identify the differing capabilities of various geographic 
areas, and provide appropriate incentives for second 
generation biofuels versus food crop-based sources. 
 
---------------------------------------- 
Ensuring Commitment by All Member States 
---------------------------------------- 
 
¶4.  (SBU) One issue that appears very important to the GOS 
and has not yet been resolved is the mechanism(s) available 
 
MADRID 00001240  002 OF 002 
 
 
to the EC beginning in 2014 (as prescribed by the 
legislation) if things do not develop as expected. 
Specifically, Spain's concern is that fellow Member States 
may not be fully committed to the package and all of its 
components if they perceive that they can back out of their 
commitments after the EC completes its required study of the 
legislation's impact in 2014.  Spain's view is that the 
legislation must be binding and require shared commitments of 
all Member States without the prospect of 'backing out' if 
meeting targets becomes too difficult.  Lucas referred 
specifically to this as the Revision Clause:  Article 20, 
Paragraph 6, Subparagraph D.  Spain's preference is to have 
all Member States fully commit to the structures that the law 
would create, without the risk that Member States would be 
able to pressure the EC to change or eliminate systems such 
as the CO2 emissions trading scheme.  To paraphrase, his 
concern is that this Revision Clause may result in the baby 
being thrown out with the bathwater if enough political 
pressure is applied as part of the 2014 review. It is 
important, according to Lucas, that this legislation not 
enable such a loophole. 
 
--------------------------------------------- -- 
Using EU Legislation as Basis for National Plan 
--------------------------------------------- -- 
 
¶5.  (SBU) The SecGen is hopeful that the EU Energy and 
Climate Legislation will be passed before the end of 2008. 
He obviously is supportive of the legislation and has 
invested a lot of time in negotiating it.  In addition to his 
belief that the legislation is in the best interests of the 
European Union, Lucas would also like to see the package 
passed to embolden his organization's national plan.  IDAE is 
currently developing the GOS' updated National Renewable 
Energy Plan for the period 2011-2020.  Lucas' view is that 
this plan, which would take effect in March 2010, would be 
much more likely to achieve the desired results if it were 
tied to obligatory EU legislation.  As one would expect, IDAE 
believes that its ability to meet its organizational goals of 
improving energy efficiency and increasing the use of 
alternative energy would be significantly enhanced in this 
situation. 
 
-------------------------------------------- 
Spain Believes the Package Will Pass in 2008 
-------------------------------------------- 
 
¶6.  (SBU) Finally, Lucas expressed his opinion that the EU 
Energy and Climate Legislation will be voted on and passed 
before the end of 2008.  He said that two months ago the GOS 
was pushing for each Directive to be voted on separately, 
believing that the prospects for passing the entire package 
with all its directives were low.  However, he said things 
have progressed quickly since then and that he expects the 
package will pass this year. 
AGUIRRE