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Cablegate: Spain Ok with Eu Biofuels Language; Supports

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

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