VZCZCXYZ0001
RR RUEHWEB

DE RUEHBO #1361 1171934
ZNR UUUUU ZZH
R 271934Z APR 09
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 8485
INFO RUEHBR/AMEMBASSY BRASILIA 8816
RUEHPE/AMEMBASSY LIMA 7403
RUEHCV/AMEMBASSY CARACAS 2096
RUEHQT/AMEMBASSY QUITO 8140
RUEHZP/AMEMBASSY PANAMA 3484
RUEHLP/AMEMBASSY LA PAZ APR OF ENERGY WASHINGTON DC

UNCLAS BOGOTA 001361 
 
SIPDIS 
SENSITIVE 
 
WHA/EPSC FOR FCORNEILLE; EEB/ESC FOR MCMANUS; DOE FOR 
LEINSTEIN 
 
E.O. 12958: N/A 
TAGS: ENRG PGOV ECON SENV CO
SUBJECT: COLOMBIA MANDATES FLEX FUEL VEHICLES DESPITE 
SKEPTICISM 
 
¶1. (SBU) SUMMARY: Under a new government decree, local 
automakers and importers will be required to sell only 
flex-fuel vehicles capable of running on any mixture of 
gasoline and ethanol up to 85 percent ethanol (E85).  The 
decree phases in the requirement for new small vehicles 
beginning in 2012 and expands to larger vehicles in 2013, but 
does not apply to existing cars or those running on diesel. 
The mandate follows an aggressive multi-year effort to 
develop a vibrant domestic biofuels market intended to 
invigorate agricultural employment and reduce carbon 
emissions.  Nevertheless, local automakers and dealers, as 
well as biofuels producers, are skeptical the flex-fuel 
vehicle mandate or the required biofuels production increase 
are feasible in the near-term. END SUMMARY. 
 
Flex-Fuel Coming to a Dealer Near You 
------------------------------------- 
 
¶2. (U) With fuel blending mandates of 10 percent ethanol 
already in place and plans to increase the mandate to 20 
percent by 2015, the GOC has taken the further step of 
requiring the phase-in of flex-fuel technology in all new 
gasoline-fueled vehicles starting in 2012.  The requirement 
begins with 60 percent of small cars (2000 cubic centimeters 
engine displacement or less) in 2012 and extend to larger 
passenger vehicles the following year.  By 2016, all new 
passenger vehicles manufactured or imported into Colombia 
must incorporate flex-fuel technology.  According to Decree 
1135, the technology must allow the vehicle to run on any 
blend up to 85 percent ethanol and the remainder gasoline. 
The decree also commits the Ministry of Mines and Energy to 
publish the necessary technical standards for E85 production, 
distribution, and storage by January 1, 2011. 
 
Critics: Too Much of a Good Thing? 
---------------------------------- 
 
¶3. (SBU) The GOC's high-profile biofuels program has 
generally received widespread support from the industrial and 
agricultural sector over the last eight years.  However, 
automobile manufacturers, importers, and biofuels producers 
have expressed significant skepticism regarding the latest 
move.  Although flex-fuel technology has been adopted in 
larger markets such as Brazil, representatives of several 
auto import companies (e.g. BMW, Audi, Porsche) have 
complained publicly that the flex-fuel requirement cannot be 
cost-effectively implemented in Colombia by 2012 and would 
therefore block their imports.  Santiago de Francisco, Vice 
President of GM Colombia, the largest local car producer in 
Colombia, told us that his company does not oppose the GOC's 
flex-fuel goal but said the GOC should have consulted 
automakers to ensure the feasibility of meeting the 2012 
deadline. 
 
Biofuel Supply Uncertain 
------------------------- 
 
¶4. (SBU) Jorge Bendeck, President of Colombia's Federation of 
Biofuels Producers, told us he also doubted that Colombian 
ethanol producers could meet the supply requirements for E85 
by 2012.  Bendeck cited the sector's difficulty so far in 
meeting the current E10 mandate in some parts of the country 
and estimated that widespread use of E85 would require 
400,000 new hectares of sugarcane production and 35 new 
distilleries.  (NOTE: Colombia currently has five ethanol 
distilleries in operation. END NOTE.).  He also noted that 
Colombia does not have the storage or distribution facilities 
in place to handle blends up to E85.  Nevertheless, Ministry 
of Mines and Energy Hydrocarbons Director Julio Cesar Vera 
affirmed the GOC's intention to proceed with the new 
requirements and noted that Decree 1135 leaves room for 
expanding the E85 mandate to motorcycles and other 
gasoline-engine equipment in the future. 
BROWNFIELD