The European Union is withdrawing its proposal to label Canada’s oil sands as “dirty” in a decision that would open the European market to fuel generated in Alberta.
As the old continent’s worries over its dependence on Russian energy imports increases, EU members are softening their stance on Canada’s oil sands. Last year, they said that Alberta’s oil was the source of highly polluting gasoline — something like 23% more than the one derived from conventional crude.
The forthcoming EU legislation to promote cleaner transport fuels would have set hefty penalties on those made from Canada’s oil sands crude, because of the higher level of carbon dioxide emissions associated with its production.
But under the new draft proposal, European oil refiners would only have to report an EU-wide average of the emissions for the feedstock they use, rather than single out the oil sands.
The policy change would represent a much-needed win for Canada’s oil sands sector, which has been forced to defend its operations and environmental record against a number of critics.
But Greg Stringham, vice-president for oil sands and markets at the Canadian Association of Petroleum Producers (CAPP), told Financial Post the new approach take by the EU still falls short.
“From what we have heard … while it doesn’t discriminate against Canadian oil to the degree it initially did, it still doesn’t encourage transparency,” the industry’s main lobby group leader was quoted as saying.
Canada’s federal government has campaigned aggressively against the EU proposal to the point it even threatened to take the case to the World Trade Organization (WTO).
The country’s natural resources minister Joe Oliver presented in November a report arguing the methodology used by the EU to create its fuel quality directive (FDQ) was deeply flawed. That document is believed to have triggered the EU recent change of heart.
The new fuel quality directive, likely to be published in July, will need approval from the EU member states and the parliament.