EU committee makes no decision on oilsands

February 27, 2012

In a highly anticipated vote, a European Union committee of technical experts failed to reach a decision on whether to approve a European Commission proposal to classify oilsands crude oil as more harmful to the environment than other forms of fuel. The proposal will now go to a council of EU ministers, with a final decision expected by June.

The proposal by the European Commission, the EU’s executive arm, would constitute a revision of the EU’s Fuel Quality Directive, which aims to reduce carbon emissions by 6% from 2010 levels by 2020. The proposal would not ban oilsands crude oil, but it would assign it a greater carbon footprint than conventional crude oil. Under the proposal, oilsands crude oil would be deemed to emit 22% more greenhouse gas by weight than average crude oil.

A “qualified majority” – 255 votes from a total of 345 – was needed to accept or reject the proposal. The committee voted as follows: 89 points in favour of the proposal, 128 against, and 128 abstained.

Key to the result was the abstention of France, Britain, and the Netherlands, home to oil companies with significant oilsands interests.

Europe does not directly buy crude oil from the oilsands, but Canada’s concern is presumably that it any adverse conclusion by the EU may damage the image of the oilsands, set a precedent for possible similar actions in other jurisdictions, and affect potential future sales.

Canada has lobbied against the proposal for months, arguing that it is discriminatory and could hinder trade relationships. It has even threatened to take the matter to the World Trade Organization if the committee approved the plan.

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