AUSTRIA FAVORS FRENCH PROPOSAL ON BIOFUELS SUSTAINABILITY

UNCLAS VIENNA 001391 SIPDIS EU/ERA FOR MATTHEW BEH OES.EGC FOR DREW NELSON E.O. 12958: N/A TAGS: KGHG EAGR SENV ENRG TRGY EUN AU SUBJECT: AUSTRIA FAVORS FRENCH PROPOSAL ON BIOFUELS SUSTAINABILITY CRITERIA; MAINTAINS HIGH PRODUCTION GOALS REF: STATE 98110 ¶1. Embassy reps discussed biofuels sustainability with biofuels experts Sonja Schantl and Heinz Bach in the Ministry of Agriculture, Environment, Forestry and Water Management (who have the lead on Austria's biofuels position within the EU). Our interlocutors told us that ecological and social sustainability criteria for biofuels production should be an "indispensable" part of the Climate and Energy package. Austrian experts believe that such criteria are already met in domestic production and probably in most other EU countries, so sustainability criteria must focus on imported feedstock processed into biofuels in the EU. This is particularly important for third countries with tropical rainforests. ¶2. With regard to a deal on EU-wide sustainability criteria as proposed by the French EU Presidency, Bach told us the GoA "could live with" the two-phase approach. Under this plan only biofuels delivering life-cycle CO2 savings of at least 35% over fossil fuels would count in the first phase, with required savings of up to 50% in the second production phase (as of 2017). Bach said the GoA would reject the EU Parliament's Industry and Energy Committee vote September 11 foreseeing an obligation for biofuels to offer at least 45% carbon emissions savings and 60% after 2015 because these goals are "unrealistic". BACKGROUND -------------- ¶3. The outgoing government sees biofuels production as an important contribution to greenhouse gas emissions reduction and is still supporting the EU goal to raise biofuels to 10% of the fuels mix by 2020, despite criticism from environmental groups and some forces in the European Parliament. Domestically, Austria set ambitious goals: Since October 2007, the obligatory transport biofuels share is 4.3%, and will be raised to 5.75% on October 1, 2008. The share of all "alternative" fuels is planned to be 10% in 2010, and even 20% in ¶2020. ¶4. Austrian farmers welcome biofuels production as a market opportunity, according to a presentation by the Austrian Agriculture Chamber in June. At the end of 2007, bioethanol and biodiesel capacity was 560,000 tons per annum, accounting for 3.5% of fuels demand. Austria's productive capacity can be grow substantially to meet additional demand since at present "only 5.4%" of cultivable land in Austria is used for biofuels production and now that EU set-aside restrictions have been lifted as of this year. Agricultural lobbyists maintain that sustainability criteria are already in place such as restrictions against over-fertilization, measures to maintain biodiversity, and minimized shipping. ¶5. Former Austrian EU Commissioner for Agriculture, Franz Fischler, now a lobbyist for bioethanol production, emphasizes that Austria is self-sufficient on bioethanol production in terms of the 10% oil substitution goal. With regard to biodiesel he is more critical: Austria and the EU would have to import most of it, and sustainable biodiesel production is a greater challenge than bioethanol production. The EU should reconsider its biodiesel goals, Fischler opines. GIRARD-DICARLO#