A mandatory EU requirement to label oil from tar sands as more polluting than other forms of crude could be scrapped altogether following years of lobbying from top producer Canada, according to a draft European Commission proposal.
The change removes one obstacle to Canada shipping crude from tar sands to Europe, but will be criticised by environmental campaigners.
The clay-like sands have to be dug up in open-pit mines with massive shovels, or blasted with steam and pumped to the surface, before oil can be extracted.
As a result, the oil costs more to produce than regular crude, uses more water and energy, and emits more carbon.
Canada, oil majors and the refining industry have fiercely opposed EU plans to label tar sands as highly polluting.
In the context of the Russia/Ukraine crisis and fears about European energy security, Canada argues Europe should be embracing its oil as a secure form of energy.
“We don’t see the crisis in Ukraine as simply an opportunity to market Canadian products, but obviously we’re deeply engaged in a discussion with our allies on how we can make sure that globally our energy supplies are secure and stable,” Canadian Prime Minister Stephen Harper told reporters after G7 talks in Brussels on Thursday (5 June).
He did not specifically mention the proposed EU law, but Canada’s natural resources minister said he raised it on the sidelines of G7 energy ministers’ talks in Rome last month.
The European Commission draft document proposed that oil refiners would only have to report an EU-wide average of the emissions for the feedstock they use.
“The proposed methodology requires suppliers to report a (European) Union average greenhouse gas emission intensity per fuel with an option to report supplier specific values,” the draft said.
In an annex, it retains the value of 107 grams of CO2 for natural bitumen, another name for tar sands, compared with 93.2 for conventional crude, but refiners would not have to report using crudes with the higher value.
However, the draft proposed a review by the end of 2016 to again address the case for introducing higher values for individual fuel sources.
The debate about labelling tar sands as particularly dirty dates back to 2009 when EU member states approved legislation with the aim of cutting greenhouse gases from transport fuel sold in Europe by 6% by 2020, but failed to agree how to implement it.
In 2011, the Commission agreed tar sands should be given the 107 grams of CO2 value, but member states could not agree on the proposal and the Commission has been reconsidering it ever since.
Many scientists say that tar sands oil should be left in the ground if the world is to stand a chance of preventing the most devastating consequences of global warming.
The Commission said it could not comment on an unpublished draft, which is still being discussed within the EU executive.
Laura Buffet, clean fuels officer at sustainable transport group Transport & Environment, sent EURACTIV a statement saying: "Company-specific carbon values would provide the incentive for one company to perform better than its competitors, for example by not supplying high-carbon oil like tar sands or oil shale in Europe. If company-specific values are not mandatory, at the very least we must ensure that they are an option to reward oil companies for not bringing in high-carbon oil."
On 4 October 2011, the European Commission college voted on a review of the Fuel Quality Directive which assigns a default value 107 grams CO2 equivalent per megajoule (CO2eq/MJ) for oil produced from tar sands.
This figure is higher than the 87.5g CO2eq/MJ average assigned for other crude oils, because of the higher carbon intensity associated with the oil extraction process. The EU’s move led to protests from North America.
Last July, the US trade representative Michael Froman told a Congressional House Ways and Means Committee hearing that the FQD guidance on tar sands was “discriminatory, environmentally unjustified and could constitute a barrier to US-EU trade.”
“We continue to press the Commission to take the views of stakeholders, including US refiners under consideration as they finalise these amendments,” he said.
In March of this year, Dan Mullaney, the assistant US trade representative for Europe confirmed to EURACTIV that: “we are [still] discussing the Fuel Quality Directive with the EU”.
EU documents seen by EURACTIV in 2012 show that Canada too has “raised the issue in the context of EU-Canada negotiations on a free trade agreement.” Canada’s natural resources minister, Joe Oliver, also wrote to the EU’s energy commissioner, Günther Oettinger warning that the directive was “discriminatory and potentially violates the European Union’s international trade obligations.”
But the EU had appeared to stand firm in the face of such weighty gambits. As recently as a year ago, the EU’s climate action commissioner,Connie Hedegaard insisted that “trade must not be used as an excuse to prevent environment progress.”
- 2020: Deadline for EU to reduce greenhouse gas intensity of transport fuels by 6%
- European Commission: Fuel Quality Monitoring
- Jacob's Consultancy: Oil sands and unconventional oil
- Stanford University: Upstream greenhouse gas (GHG) emissions from Canadian oil sands as a feedstock for European refineries
NGOs & Think-Tanks
- Transport and Environment: Tar sands and the Fuel Quality Directive
- Oil Change International: Petroleum Coke: The coal hiding in the tar sands
- Idle No More
- Friends of the Earth: Canada’s dirty lobby diary: Undermining the EU Fuel Quality Directive
- Greenpeace: Dirty Oil: How the tar sands are fuelling the global climate crisis