Wednesday

21st Feb 2024

EU to put higher pollution price on tar sands

  • Canada is the world's largest producer of tar sands (Photo: CanadaGood)

The European Commission on Tuesday (4 October) proposed that oil derived from tar sands be given a higher greenhouse-gas emission value, a move slammed as "unjustified" and "discriminatory" by Canada, the world's largest producer of this fossil fuel.

After more than a year of internal wrangling and amid strong lobbying from the oil industry and the Canadian government, the 27 EU commissioners agreed to qualify tar sands as a quarter more CO2 polluting than crude oil. The draft bill still needs approval of the EU legislature and member states and will require suppliers to reduce transport-fuel carbon emissions.

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“With this measure, we are sending a clear signal to fossil-fuel suppliers. As fossil fuels will be a reality in the foreseeable future, it’s important to give them the right value,” EU climate commissioner Connie Hedegaard said after the decision was approved. The Danish politician managed to overcome resistance from her German colleague, in charge of energy policy, who had adopted a more industry-favourable line.

But the move is likely to complicate EU-Canadian talks on a free trade agreement that should have been sealed later this year.

Canada's natural resources minister, Joe Oliver, on Tuesday said his government may take the EU to the World Trade Organisation panel.

“Should the European Union implement unjustified measures that discriminate against the oil sands, we won’t hesitate to defend our interests,” he said.

“They are doing it believing, apparently, that there is no downside,” Oliver added. He explained that in Canada's view there is no "scientific justification" for labelling oil-sands-derived fuel as more polluting than crude oil. "We don’t like the potential stigmatisation and we don’t think it is justified.”

And Europe is discriminating against a type of oil of which it imports very little, whereas crude from Russia and Nigeria is labelled as less polluting, because the bloc is importing more of this than of Canadian tar sands-extracted fuel.

David Plunkett, ambassador-designate of Canada to the EU also said the draft law would "unfairly discriminate" against Canadian oil.

"Oil sands crude has similar greenhouse gas emissions to many other crude oils imported by Europe," he said in an emailed statement, adding that in the last 20 years, greenhouse gas emissions per barrel of oil sands were reduced by 29 percent. Plunkett denied, however, that the bill would impact EU-Canada free trade negotiations.

Canada's concerned by the domino-effect that this ruling may trigger around the world as other jurisdictions take a lead from the EU, rather than its actual exports to Europe, which are insignificant. Lawmakers in the US may look at the European bill and replicate it, which would deliver a major blow to Canada's oil industry. The US Congress will decide this year whether to allow a planned pipeline carrying crude oil extracted from the tar sands of Alberta to refineries on the US Gulf of Mexico.

Green groups applauded the move, however.

"Tar sands extraction is a very dirty business for the climate, polluting rivers, lacing the air with toxins and turning forests into wasteland. Despite coming under intense pressure from oil lobbyists and Canada, the commission is doing the right thing by wanting to keep tar sands out of Europe to protect the climate,” Greenpeace campaigner Franziska Achterberg said in a statement.

Members of all political parties in the European Parliament also welcomed the fact that the commission resisted to pressure from the industry and Canada. "I hope member states will do the right thing and not cave into delaying tactics in the form of a Canadian compromise which is rumoured to be proposed by some member states," said British Labour MEP Linda McAvan.

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EU climate commissioner Connie Hedegaard appears to have temporarily backed down from plans to make reference to Canada's controversial tar sands in the EU's upcoming directive on fuel quality.

Tar sands go political as key vote ends in deadlock

EU member states on Thursday failed to name tar sands a high polluting energy source following intense lobbying by oil companies and Canada. Green groups hope the politicisation of the discussion will work in their favour.

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EU measures to cut CO2 emissions and improve the climate have sparked outrage in the global aviation industry and most recently in Canada, home to the world’s second largest fossil fuel reserves.

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