EU Drops “Tar Sands” Distinction in Fuel Quality Directive

The European Commission released a new proposal this week for implementing the 28-nation bloc’s Fuel Quality Directive. Notably, this revised plan omits a requirement that oil extracted from tar sands be labelled as ‘‘highly polluting,’’ in a move that is expected to assuage past tensions with Canada on the subject while drawing the ire of environmental groups.

The EU’s Fuel Quality Directive (FQD) was amended in 2009, in the context of an agreement on a legislation package to govern the bloc’s climate and energy policies until 2020. Among the revised FQD’s aims is a requirement that suppliers slash the ‘‘life-cycle greenhouse gas intensity’’ of energy sources for road vehicles - including fuel - by 6 percent by 2020 from 2010 levels.

Among the specific changes in the new FQD was a stipulation that, from 2011, suppliers would need to report on the greenhouse gas intensity of the fuel stocks provided to relevant authorities in EU member states.

However, the legislation at the time did not include rules to account for greenhouse gas (GHG) emissions from various crude oil sources, instead requiring the EU executive to propose relevant implementing legislation.

The European Commission proposal announced on Tuesday would no longer require that oil derived from tar sands be classified separately from other types of oil, contrary to a previous iteration of the proposals made nearly three years ago.

Instead, it will establish a methodology for calculating the carbon intensity for four broad fuel types, namely, petrol, diesel, Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG). These figures will then be used by suppliers for the required exercise of the overall fuel feedstock. The new proposal also obligates suppliers to inform the Commission as to the origin of their feedstock.

Some environmental groups have historically argued that tar sands oil should be assigned a separate carbon intensity value. Extracting oil from clay-like sands requires large volumes of water and energy and the derived oil is known to emit more carbon over its life-cycle. Green campaigners have also warned that the process can destroy fragile ecosystems and leave lasting scars on the natural landscape.

The change in the Commission’s proposal comes hot on heels of the successful signing of a bilateral free trade pact between the EU and Canada. The Comprehensive Economic and Trade Agreement (CETA), was inked last month, nearly a year after officials reached agreement in principle of the subject.

The prospect that tar sands could be singled out as particularly polluting had been a sore point between the EU and Canada, given that the Canadian province of Alberta has one of the world’s largest oil reserves, surpassed only by Saudi Arabia and Venezuela. The energy sector as a whole accounts for 6.5 percent of Canada’s GDP and the country has weighed in among the top ten energy producers in the world in recent years.

The new proposal must now go to the European Council for approval within the next two months. The proposal will then be submitted to EU parliamentarians for review.