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