VZCZCXRO6549
PP RUEHRG
DE RUEHBR #1089 1531920
ZNR UUUUU ZZH
P 021920Z JUN 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 5574
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 2191
RUEHSO/AMCONSUL SAO PAULO 7085
RUEHRG/AMCONSUL RECIFE 4885
RUCPDO/USDOC WASHDC
RUEHRC/USDA WASHDC
RHEBAAA/USDOE WASHDC
RHEHNSC/NSC WASHDC

UNCLAS BRASILIA 001089 

SIPDIS 

SIPDIS 

USDOE FOR GWARD/SLADISLAW 
USDOC FOR 3134/ITA/USFCS/OIO/WH/EOLSON 
USDOC FOR 4332/ITA/MAC/WH/OLAC/MWARD 
USDA FOR FAS/ITP AND FAS/FAA/WH 
STATE PLS PASS TO OPIC FOR MORONESE, RIVERA, MERVENNE STATE PLS PASS TO EXIM FOR NATALIE WEISS, COCONNER 
STATE PLS PASS TO USTDA FOR AMCKINNEY 
STATE PLS PASS TO USAID FOR LAC/AA 
STATE PASS USTR FOR MSULLIVAN STATE FOR OES/STC GDRAGNICH/TSCOTT STATE FOR WHA/BSC WPOPP 
E.O. 12958: N/A 
TAGS: TRGY ENRG KSCA EINV ETRD EAGR BR
SUBJECT: BRAZIL TO PRODUCE PAPER ON TECHNICAL BILATERAL COLLABORATION ON ETHANOL/BIOFUELS; FRANCE AND JAPAN ANNOUNCE AGREEMENTS 

REF: BRASILIA 000773 

¶1. Science Counselor met on June 1 with Paulo Rogerio Goncalves, Director of International Relations for Brazil's Ministry of Science and Technology. Goncalves said that Minister of Science and Technology Rezende had asked his scientists to quickly develop a non-paper to address how Brazil envisioned technical collaboration with the United States in ethanol/biofuels. While awaiting that document, Goncalves spoke in general terms about Brazil's overall vision. 

¶2. Goncalves said that Brazil does not want to be in the position of trying to supply the world with ethanol, if it tried the country would become one large sugar cane plantation and would not be able to feed its own people. In addition, Brazil would always be open to the risk of a virus destroying much of their yield, although it had tried to minimize that risk by developed nearly 100 different strains of sugar cane (some better for fuel, others better for consumption). Brazilian scientists would like to work with their U.S. counterparts to possibly develop a fuel that would serve the consumption needs of both countries, and perhaps the world. He was aware that the product produced in Brazil now may not be suitable for colder climates. Goncalves recounted an experience years ago when he lived in the south of Brazil, where the colder temperatures during winter caused his ethanol-fueled car not to start. 

¶3. Goncalves, who last week accompanied Minister Rezende on a visit to Europe, said he understood that the United States needed more specific information about possible technical collaboration because each country has different needs. While in London, he said, the Brits expressed a desire to collaborate with Brazil on ethanol, he heard the same thing in Brussels. Each one of those relationships will be different, he said. 

¶4. In related stories, the May 26 issue of the newspaper Estado de Sao Paulo, ran an article saying that Brazil and France planned to announce during the upcoming G-8 meeting in St. Petersburg, Russia, the creation of an international fund for the dissemination of ethanol technology in developing countries. According to the article, this is part of an effort by the government of Brazil to transform ethanol into a commodity and to encourage developed economies to collaborate with poorer countries. Another objective mentioned in the article was to raise the value of sugar cane produced in countries in Africa and the Caribbean, and to reduce the dependence of these nations on petroleum. Brazil's President Lula and French President Chirac signed this agreement on May 25. 

¶5. Two major Brazilian dailies reported on June 2 that Japan will invest approximately US$500 million in bioenergy in Brazil. The article says the money will be used in ethanol and biodiesel programs for research and financing for the installation of new industrial plants. An agreement between Brazil and Japan will be signed in October and the investment funds will start flowing as early as March 2007 the article reports. Ricardo Dornelles, director of the Department of Renewable Energy in Brazil's Ministry of Mines and Energy, is quoted as saying that countries are looking for alternatives to petroleum and that Brazil is confronting the challenge of creating a market for ethanol and biodiesel. 

¶6. Post will pass Brazil's non paper on bilateral cooperation on research on biofuels/ethanol when received. 

CHICOLA