The issue is seen as a key test of the EU's ability to implement its climate change policies while under heavy pressure from the Canadian government and oil companies who want to prevent billions of barrels of tar sands oil being designated as especially harmful to the environment. The lobbying has been intense, with Canada secretly threatening a trade war with Europe if the proposal is passed, while the Nasa climate scientist James Hansen has said full development of the tar sands would mean it was "game over" for the climate.
Darek Urbaniak at Friends of the Earth Europe said: "Some European governments have given in to Canadian and oil lobby pressure, instead of saying no to climate-hostile tar sands. High-polluting sources of fuels, such as tar sands, must be cleaned up or kept out of Europe – they are the dirtiest source of transport fuels, and will undermine Europe's ability to reach its climate ambitions."
The vote by officials needed a majority of about three-quarters to pass, which would have led to the proposal passing quickly into law. In the event, there were 89 votes for the proposal, 128 against and 128 abstentions, including the UK. The impasse means the decision will be referred to ministers, who will send a proposal to the European parliament for passing into law. The decision should have been made over a year ago.
"This vote further delays a decision on tar sands, while tar sands extraction continues, causing irreversible damage to the climate, environment and local communities," said Urbaniak. "However, the worst-case scenario of a vote against was avoided and this could represent an opportunity for a more responsible decision by ministers in June."
The issue has drawn fire on to the UK's transport minister, Norman Baker, whose Liberal Democrat colleagues have likened tar sands to "land mines, blood diamonds and cluster bombs", but whose coalition government was revealed as giving secret help to Canada by the Guardian. The UK and Canadian governments were unable to comment on the vote result immediately. The senior Greenpeace campaigner Joss Garman said: "Today's stalemate isn't an excuse to kick the decision on tar sands into the long grass. It is now vital that Norman Baker and his party leader Nick Clegg uses this short pause to stand up to the oil industry lobbyists and their allies to ensure that one of the world's dirtiest fossil fuels does not end up fuelling our cars."
Canada's vast tar sands are the second largest reserve of oil after Saudi Arabia and many of Europe's largest oil companies have major interests in the fields, including BP, Shell, Total and Statoil. The EU proposal is to label tar sands oil as causing 22% more greenhouse gas emissions than conventional oil on average, because of the extra energy needed to blast the bitumen from the bedrock and refine it. This would make it unattractive to Europe's fuel suppliers who have to cut the impact of their products on global warming and would also set a very unwelcome international precedent for Canada.
The Canadian government argues it is unfair to single out tar sands when some other crude oils are also highly polluting but its opponents, including Europe's climate action commissioner, Connie Hedegaard, argue those can be dealt with in due course and that the scientific case against tars sands is clear. Canada convened a high-level private summit in 2011 to discuss winning the tar sands argument in the EU, to protect the "huge investments from the likes of Shell, BP, Total and Statoil".
The UK proposed an alternative "banded" approach to ascribing carbon emissions to different fuel types, which does not single out tar sands. Opponents dismiss the proposal as a delaying tactic and the Guardian understands that the UK has failed to present its proposal formally or provide supporting evidence. In January, the Guardian revealed another compromise plan that would weaken the impact on tar sands oil, this time from the Netherlands.