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Cablegate: Biofuels in Brazil

VZCZCXRO3747
PP RUEHRG
DE RUEHBR #2171/01 3271045
ZNR UUUUU ZZH
P 231045Z NOV 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 0500
INFO RUEHRG/AMCONSUL RECIFE 7402
RUEHRI/AMCONSUL RIO DE JANEIRO 5468
RUEHSO/AMCONSUL SAO PAULO 1205
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 04 BRASILIA 002171

SIPDIS

SENSITIVE
SIPDIS

STATE FOR P GREG MANUEL, BRENDA HAENDLER, WHA/EEB(FCORNEILLE)
STATE ALSO FOR EEB/ESC/IEC, OES
STATE PLS PASS USITC, ATTN: L.M. SCHLITT
USDOC FOR ITC

E.O. 12958: N/A
TAGS: ENRG SENV PREL EINV ECON PGOV OTRA BR
SUBJECT: BIOFUELS IN BRAZIL

REF: STATE 133131

1. (SBU) Summary: In response to reftel request, and pursuant to
request for extension to Oct. 19 response date, Post submits the
following information regarding the development and adoption of
bio-based chemical products and liquid biofuels in Brazil, including
research and reports available, funding, investment incentives and
tax policies, etc. End summary.

2. (U)

----------------
RESEARCH/REPORTS
----------------

With regard to reftel paragraph 6, which requested titles, authors,
and dates of publication of significant existing academic research,
industry reports, government publications and/or other information
on foreign government policies relating to the development and
adoption of bio-based chemical products and liquid biofuels
published since 2004:

a. The USDA's Foreign Agricultural Service (FAS) publishes
annual reports regarding production of ethanol and biodiesel in
Brazil each year. 2007 reports, available from FAS's Office of
Agricultural Affairs and its Agricultural Trade Office (ATO),
located in U.S. Embassy Brasilia and U.S. Consulate Sao Paulo,
respectively, are:

- BR7011 Brazil Biofuels Annual-Ethanol
- BR7012 Brazil Biofuels Annual-Biodiesel
- BR7015 Brazil Sugar Semi-Annual, which was released on Oct. 18 and
contains ethanol statistics, as well.

Contact the ATO as per information in paragraph 10 for copies via
e-mail of these and previous reports.

b. www.biodiesel.gov.br is a GoB site with in-depth information
on their biodiesel program, including legislation, research and
production. This site is available only in Portuguese.

c. http://www.portalunica.com.br/ portalunica/?Secao=referencia
provides information on legislation and government programs
supporting ethanol production and use. While UNICA has an English
language site, this section is only available in Portuguese. [Note:
any spaces in any link referenced in this document must be deleted
before attempting to utilize the link. Cable format prohibits
sending strings in excess of 55 characters without a space or return
embedded. End note.]


-----------
R&D Funding
-----------

3. (U) Levels and trends of foreign government funding for R&D:

- Information on this topic obtained from the Instituto Agronomo,
IAC, and EMBRAPA, the Empresa Brasileira de Pesquisa Agropecuaria,
can be obtained in collaboration with the ATO.

- In addition, the Conselho Nacional de Desenvolvimento Scientifico
e Tecnico (CNPq)/National Council for Scientific and Technical
Development, an agency of the Brazilian Ministry of Science and
Technology charged with scientific and technical research and the
development of human resources, has recently announced $22 million
Brazilian reais (approximately US$12.25 million) investment over the
next few years for research in biodiesel and ethanol, through three
sectoral funds: Petroleum and Natural Gas (CT-Petro), Agrobusiness
(CT-Agro) and Biotechnology (CT-Biotecnologia). This R&D investment
will be primarily designated for the center-west, north and
northeast regions of Brazil, which have historically been
underinvested for biofuels R&D.
Sources (in Portuguese): http://www.biodieselbr.com/noticias/
energia/r1-r22-milhoes-pesquisa- biodiesel-etanol-23-10-07.htm and
CNPq links, http://www.cnpq.br/editais/ct/ 2007/031.htm and
www.cnpq.br/editais/ct/2007/039.htm.

--------------------------------------
Investment Incentives and Tax Policies
--------------------------------------

4. (SBU) Investment incentives and tax policies to encourage
development or adoption of biofuels:

BRASILIA 00002171 002 OF 004

The FAS has a report designated for internal USG use only: BR5016,
Fuel Taxes in Brazil. This report can also be obtained from the
ATO.

-------------------------
Mandatory use regulations
-------------------------

5. (U) Mandatory use regulations:

BR7011 and BR7012 reports, mentioned in paragraph 2, contain this
information.

-------------------------------
Agricultural Feedstock Programs
-------------------------------

6. (U) Information had been requested from FAPESP, IAC (Instituto
Agronomico de Campinas, State of Sao Paulo), and EMBRAPA but has not
been received as of Nov. 19, 2007.

--------------
Trade Policies
--------------

7. (SBU) Trade policies, including tariffs and preferential trade
agreements:

The Brazilian Ministry of External Relations (MRE) has been very
active, particularly in the past two years, in signing Memoranda of
Understanding (MOUs) or other agreements on biofuels with a number
of countries, including the United States. In addition, there has
been significant private sector interest both from within and
outside of Brazil in partnering with the GOB and Brazilian private
industry. Following are the countries with which the MRE has
published its signed agreements with regard to biofuels or renewable
energy on its website (http://www.mre.gov.br):

Austria (Sep. 19, 2005)
Belize (Sept. 13, 2005)
Benin (Aug. 15, 2007)
Chile (Apr. 26, 2007)
Costa Rica (Dec. 13, 2005)
Ecuador (April 4, 2007 - several)
El Salvador (Sept. 13, 2005 and June 9, 2006 - Ethanol and Castor)
France (May 25, 2006)
Germany (June 15, 2005)
Guatemala (Sept. 12, 2005)
Guyana (Sept. 12, 2005)
Haiti (May 23, 2006)
Honduras (Aug. 7, 2007)
India (Apr. 8, 2002)
Jamaica (May 16, 2005/Feb. 15, 2007)
Mexico (Aug. 6, 2007)
Nicaragua (Aug. 8, 2007)
Panama (Sept. 13, 2005/Aug. 10, 2007)
Paraguay (May 21, 2007)
Senegal (May 16, 2007)
Slovenia (July 29, 1998)
South Korea (Nov. 16, 2004 (between Ministries of Mines and Energy)
United States of America (Mar. 9, 2007)
Uruguay (Feb. 26, 2007)

8. (SBU) Other agreements and "Plans of Action" that have more
broadly encompassed "science and technology" cooperation-a few
specifically mentioning renewable energy and biotechnology, some
less specific or establishing bilateral consultative
mechanisms--have also been signed with the following nations:

China (Mar. 25, 1982, with several adjustments since)
Cuba (March 18, 1987 and June 27, 1995, the latter specifically
mentioning cellulosic bagasse)
European Union (Jan. 19, 2004; July 5, 2007)
Ghana (July 10, 2006) - Established EMBRAPA regional office
Hungary (July 20, 1986/Nov. 17 and 26, 1987)
Iraq (Aug. 26, 1981)
Israel (Feb. 5, 1973/May 29, 2005)
Italy (Feb. 12, 1997)
Ivory Coast (Oct. 27, 1972 and May 12, 1987)
Japan (May 25, 1984)
Kuwait (May 8, 2002)
Lebanon (Feb. 17, 2004)
Liberia (Nov. 21, 1977)

BRASILIA 00002171 003 OF 004


Libya (June 30, 1978)
Malaysia (Apr. 26, 1996)
Mali (Oct. 7, 1981)
Morocco (April 10, 1984)
New Zealand (Nov. 4, 1986)
Pakistan (Oct. 1, 1988)
Peru (Nov. 9, 2006) Note: two agreements, one specifically on
mining and energy and one on biotechnology
Tunisia (Mar. 13, 2002)
United Arab Emirates (Oct. 11, 1988)
United Kingdom and Northern Ireland (Mar. 7, 2006)

9. (SBU) As per paragraph 7 of reftel, following is a list of
leading firms and organizations with significant industrial
biotechnology production or R&D activities in liquid biofuels and/or
bio-based chemicals, along with contact information (e-mail and
website). For specific persons to contact at each organization,
please consult the USDA's ATO as per para. 10. (Note that some
interlocutors at these organizations may only speak Portuguese or
very basic English, and many of the websites are only in Portuguese,
as well.)

ABIOVE - Assoc. Bras. Ind. de Oleos Vegetais
Av. Vereador Jose Diniz 3707 - conj. 73
Sao Paulo SP
Tel. 55 11 5536-0733
Fax: 55 11 5536-9816
abiove@abiove.com.br
www.abiove.com.br

BRASIL Ecodiesel
End.Praia de Botafogo, 501 S/701 b
Rio de Janeiro RJ
55 21 2546-5018
55 21 2546-5040
ourique@brasilecodiesel.com.br
www.brasilecodiesel.com.br

COPERSUCAR
Av. Paulista, 287 - 1o, 2o e 3o Andares
Sao Paulo SP
55 11 6618-8824
55 11 6618-8570
amsetten@copersucar.com.br
www.copersucar.com.br

COSAN S/A Industria e Comercio
Av. Juscelino Kubitschek, 1726 - 6o Andar
Sao Paulo SP
55 11 3897 9797
55 11 3897 9787
cosansp@.uol.com.br
www.cosan.com.br

CRYSTALSEV Comercio e Representacoes Ltda.
Av. Antonio Diederichsen, 400 - 18o Andar
Ribeirao Preto SP
55 16 2101-4400
55 16 3623-0300
damaris@crystalsev.com.br
www.crystalsev.com.br

CTC Centro de Tecnolgia Canavieira
Fazenda Santo Antonio s/no CP 162
Piracicaba SP
55 19 3429-8199
55 19 3429-8135
william@ctc.com.br
www.ctc.com.br

DEDINI S/A - Industria de Base
Rod.Rio Claro-Piracicaba Km 26,3
Piracicaba SP
55 19 3403-3006
55 19 3421-3642
jose.oliverio@dedini.com.br
www.dedini.com.br

GRANOL Ind. Com. E Exportacao S/A
Rua Carmo do Rio Verde, 241 - 6o Andar
Sao Paulo SP
55 11 2162-4400
55 11 2162-4400
granol@granol.com.br

BRASILIA 00002171 004 OF 004


www.granol.com.br

GRUPO Agropalma
Rodovia PA 150, Km 74
Tailandia PA
55 91 4009-8199
55 91 4009-8066
porfirio@agropalma.com.br
www.agropalma.com.br

LOUIS Dreyfus Commodities Brasil S/A
Av. Brigadeiro Faria Lima, 1355 13o andar
Sao Paulo SP
55 11 3039-6893
55 11 3814-3235
fabio.morel@ldcommodities.com
www.ldcommodities.com

UNICA - Uniao da Agr. Canavieira de SP
Av. Brig. Faria Lima, 2179 - 9 and.
Sao Paulo SP
55 11 3812-2100
55 11 3812-1416
padua@unica.com.br
www.unica.com.br

10. (SBU) As referenced above, ITC may contact the ATO (Director:
Morgan Perkins) in U.S. Consulate Sao Paulo for additional
information on many of the reference points above; e-mail:
morgan.perkins@usda.gov and tel. 55 11 5186-7188. Richard Driscoll,
Economic, Science, Technology and Health (ESTH) Counselor in U.S.
Embassy Brasilia, may be of assistance on the science, technology
and environmental-related aspects of biofuels. E-mail:
driscollrj@state.gov; tel. 55 61 3312-7401. Economic officer and
Mission Brazil's biofuels coordinator Gabrielle Sarrano in U.S.
Embassy Brasilia can help coordinate with ATO, ESTH, or others for
any additional information needed; sarranogh@state.gov or tel. 55 61
3312-7154.

SOBEL

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