French Carbon Footprint Eco-Labeling -- a Potential

UNCLAS SECTION 01 OF 02 PARIS 001543

SIPDIS
SENSITIVE

State pass USEPA for International/Anna Phillips
State pass USTR
USDOC/ITA FOR Ann Ngo
GENEVA AND BRUSSELS FOR USTR

E.O. 12958: N/A
TAGS: ETRD SENV EAGR KIPR KGHG ISO FR
SUBJECT: French Carbon Footprint Eco-Labeling -- a Potential
Standards Trade Barrier

PARIS 00001543 001.2 OF 002



1. (U) SUMMARY: French Government environment and consumer
protection officials told Embassy that they are developing a
mandatory carbon footprint label for consumer products, with
implementation to begin January 1, 2011. The Trade Minister's
office was unaware of the proposed carbon labeling effort. Intended
by the Environment Ministry to send a "strong signal" to the
consumer to consider carbon, consumption, and environmental impact,
the measure could pose significant barriers to trade for U.S.
exporters to France, especially small and medium enterprises. Some
French industries, e.g. Champagne producers are already assessing
their carbon footprint, and looking to use it for commercial
advantage. END SUMMARY


Carbon Labeling in "Grenelle 2"
--------------

2. (SBU) Increasing consumers' awareness of their carbon footprints
is an element of the French environmental legislation currently
before the Parliament, known as "Grenelle of the Environment 2,"
which proposes a variety of measures to address climate change. The
proposed carbon label ISO 14064 would make carbon labels mandatory
on all French products, with publication of sectoral regulations
starting in January, 2011. "Grenelle 1" legislation, developed with
much fanfare and public input, contained mostly hortatory
principles, but if passed by the French Parliament the "Grenelle 2"
bill would codify binding regulations with real impacts on business
and consumers. Trade officials said some environmental measures
were already included in the Finance Law because of a fear that
Grenelle 2 would never be passed. However, trade contacts also told
Embassy that the Office of President Sarkozy and Environment
Minister Borloo are exerting significant political pressure to push
the bill through the Parliament, and the law is moving quickly and
quietly, with very little public discussion or engagement.

Lack of Interagency, EU, or Industry Coordination
-------------- --------------

3. (U) During a recent trip, U.S. Department of Commerce officials,
accompanied by Embassy, met with French environmental and trade
counterparts and highlighted the potential unintended consequences
of quickly enforcing a policy that required small and medium-sized
companies to carbon label products by 2011. The French trade
officials were surprised to hear of the measures, indicating that
there has been no collaboration on them between French environmental
and trade agencies. Coordination with the EU, other member states
with carbon labeling programs (e.g. Sweden and the UK),or
multilateral initiatives is sporadic and opaque, they said. Industry
trade groups, such as the food industry association with includes
Coca-Cola as a member, have been involved to some degree in various
working groups, but no formal mechanism exists for foreign companies
to provide input or seek clarification.


4. (U) At ADEME (Agency for Environment and Energy Management,) a
technical organization associated with the Ministry of Ecology,
Energy, Sustainable Development and Oceans (MEEDDM),officials told
us that they are working with the Ministry of Economy's consumer
protection staff and private consultants who are experts in carbon
lifecycle analysis. ADEME collaborates with the International
Organization for Standardization (ISO) and the French Association of
Standardization (AFNOR). AFNOR, an ISO member, is partially
responsible for setting standards and acts as a bridge between the
public and private sectors. In addition, ADEME collaborates with
the French International Center of Environment and Development
(CIRED),the agency responsible for the oversight of research in
sustainable development. According to ADEME, ISO is forming a
working group to create a methodology to determine a product's
carbon footprint, the necessary predicate to a uniform labeling
standard. ADEME admitted that smaller French companies may find it
difficult to comply with the carbon label initiative, and the food
industry lobby would prefer no labeling at all. They also expect
delayed implementation of the sectoral decrees and possible
confusion with the proliferation of labeling standards and
methodologies.

Champagne Industry expects Demand For "Green" Champagne
-------------- --------------

5. (U) Champagne producers are far ahead in assessing their carbon
footprint, part of their general strategy of keeping champagne a
high-value product through strict enforcement of its famous name,
production area, environmental quality, ethics, and global
responsibility. Officials from Champagne CIVC, an organization of

PARIS 00001543 002.2 OF 002


Champagne producers and traders, told USDOC representatives that
they independently began assessing their carbon footprint in 2002
using ADEME's first-generation software and began a carbon reduction
plan in 2003. Champagne CIVC is working with wine producers in
Bordeaux and Burgundy to undertake a similar analysis. Currently,
the Champagne producers are not labeling their products as "green,"
but anxiously await the "Grenelle 2" legislation and the final
carbon label regulations. They are also hoping to reduce their
carbon footprint before France implements a carbon tax, now being
debated in Parliament.


A Uniform Methodology: The Devil's In the Details
-------------- --------------

6. (U) Comment: A scientifically-based, uniform carbon assessment
methodology is crucial to any effort to develop a label that gives
consumers real choices. Defining the outer limits of the carbon
footprint is especially challenging. Aside from the obvious carbon
impact of long-distance transportation, U.S. companies may find
themselves disadvantaged by any unilateral French system. While
AFNOR, ADEME, and the U.S. Environmental Protection Agency are
reportedly all working on a common methodology, trade considerations
are not currently part of the mix. Carbon labeling, whatever its
merits, could present significant trade challenges to U.S. producers
and EU single market goals.

RIVKIN