BIOFUELS IN BRAZIL

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