For five long years the federal government and the oil industry have lobbied against the European Union labeling oilsands (also called tar sands) bitumen as ‘dirty oil’ in its Fuel Quality Directive (FQD). A new report released yesterday reveals the recent involvement of the U.S. in the lobby offensive to keep the EU market open for bitumen exports has tipped the scales in favour of oilsands proponents.

“The sustained attacks by the U.S. and Canada on the European Union’s key legislation on transport fuel emissions seem to be paying off,” Fabian Flues of Friends of the Earth Europe, the author of the report, admits.

The report shows the EU Fuel Quality Directive, a piece of legislation designed to reduce global warming greenhouse gas (GHG) emissions in the EU’s transportation sector, is unlikely to acknowledge fuels from different sources of oil – conventional oil, oilsands, oil shale – have different carbon footprints. Instead all oils will more than likely be treated as having the same GHG emissions intensity 'value' in the Directive. This is exactly what Canada, the oil industy and now the U.S. have been pushing for.

“Europe is again failing to stand up effectively for its own climate policy,” Flues says.

Trade talks, not science, weakening the Fuel Quality Directive

The EU has not fallen for the federal government’s argument that bitumen produces only marginally more GHG emissions than conventional oil in extraction, processing, and use. A European Commission study found bitumen’s carbon footprint is between 12 – 40 per cent higher than conventional oil.

The report reveals trade, not science, is the cause of the EU backing off from implementing the Fuel Quality Directive as it was originally meant to be implemented. To reduce GHG emissions from transportation the Directive discourages transport fuel suppliers from selling fuels with high carbon footprints in the EU. Identifying which fuels have higher carbon footprints was meant to make things easier for fuel suppliers to reduce the GHG emissions output of their product.

“The delay and weakening of the European Fuel Quality Directive once again reveals that agreements like CETA (the Comprehensive Economic Trade Agreement) are less about trade and more about limiting the ability of governments to effectively regulate in the public interest,” Scott Harris, trade campaigner with the Council of Canadians, says.

Fuel Quality Directive subject of CETA talks

The report argues the U.S. and Canada are using their own ongoing trade negotiations with the EU to undermine the Fuel Quality Directive. Canada and the EU have consistently maintained their trade negotiations for the CETA and the Directive are two separate issues. The evidence indicates otherwise:

“The foreign policy think tank The Polish Insti­tute for International Affairs reported that the FQD had been raised in the CETA negotiations and there have been calls in Canada to suspend the negotiations until the high GHG value for tar sands has been resolved to Canadian satisfac­tion,” the report states.

“While other governments are trying to make communities safer, the Canadian government is using its political muscle to push things in the opposite direction so it can export high carbon tar sands oil as quickly as possible,” Mike Hudema, climate and energy campaigner with Greenpeace Canada, says.

“It’s astonishing that as we watch the fires spread in the Northwest Territories and the flood waters rise in the Prairies our government still isn’t getting the message – climate change is real and we need action immediately,” Hudema states.

The Globe and Mail reported as earlier as 2011 that anonymous sources had said Canada had threatened “to void the free trade deal” if the Fuel Quality Directive was implemented.

“Even before it is signed, CETA is being used to water down much-needed public policy. Imagine what will happen to regulations on both sides of the Atlantic if the deal is actually implemented,” Harris of the Council of Canadians says.

U.S. joins the lobby offensive

The U.S. in some ways has been more open about its lobbying against the Fuel Quality Directive. U.S. Trade Representative Michael Froman confirmed he “raised these issues [of the FQD implementation] with senior Commission officials on several occasions, including in the context of the Transatlantic Trade and Investment Partnerships (TTIP).” The TTIP is the trade agreement between the U.S. and the EU currently under negotiation.

European Commission documents obtained by Friends of the Earth Europe reveal the U.S. trade missions has “substantive concerns” with the Fuel Quality Directive singling out fuels produced from bitumen as having a higher carbon footprint than conventional oil. Like Canada and the oil industry, the U.S. wants all oil – regardless of GHG emissions – to be treated the same as conventional oil in the Directive.

It appears this new pressure from the U.S. is the straw breaking the camel’s back:

“[Media] reports claim that the system chosen by the Commission is one of averaging of all crudes – exactly what the U.S. mission had requested in its e-mail. If they are correct, the new FQD proposal will be considerably less effective in discouraging the import of highly climate damaging oil, such as tar sands. It might well be the case that the FQD is the first environmental casualty of the TTIP negotiations,” the report states.

Recently eleven members of U.S. Congress sent a letter to the US trade mission expressing their concerns “that official U.S. trade negotiations could undercut the EU’s commendable efforts to reduce carbon pollution.” 

Image Credit: OpenEuropeBlog

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Today an oil tanker carrying between 500,000 and 600,000 barrels of western Canadian oilsands (also called tarsands) bitumen arrives in Bilbao, a port city in northern Spanish. It is the first shipment of Canadian bitumen to the European Union and a sign the federal government’s “pan European oilsands advocacy strategy” is succeeding.

“This shipment could open the door to more imports of dirty tarsands," says Franziska Achterberg of Greenpeace from Brussels. "Europe can’t be both a climate champion and a market for climate-wrecking tar sands. The EU must uphold its environmental credentials and stand up to the intense lobbying by the oil industry and the Canadian government."

Prime Minister Stephen Harper's government has been lobbying the EU since 2009 to keep its markets open to bitumen. Internal documents have shown the federal government has used its embassies in Europe “to protect and advance Canadian interests related to the oil sands.”  

EU Could Lose Credibility As World's Climate Leader

The European Union has set ambitious but necessary targets to reduce its production of global-warming greenhouse gas emissions by 40 per cent by 2030 (based on 1990 levels). No other developed country including Canada has even come close to matching this. If the EU continues to import more bitumen it will undermine its credibility as a world leader on climate change, experts say.

“The landing of massive amounts of dirty tar sands to our shores runs counter to Europe’s stated aspirations to decarbonize transport and curtail its addiction to oil. European drivers will be forced to fill up their tanks with tar sands that will raise emissions – not lower them – and push up the costs of decarbonization by billions of euros,” says Laura Buffet of Transport & Environment.

Fives Years On, Fuel Quality Directive Still Not Implemented

For years, the EU has wanted to pass legislation encouraging European transport fuel suppliers to decrease the carbon footprint of their product. The Fuel Quality Directive confirms fuels produced from bitumen have a higher carbon footprint (12 to 40 per cent higher) than fuels from conventional oil. Because bitumen is a heavy unconventional tar-like oil it requires vastly more energy to extract and process, resulting in more greenhouse gases than conventional oil.

The Fuel Quality Directive would be a disincentive for purchasing highly polluting fuels, such as oilsands. Fearing a “dirty oil” label being slapped on Canadian bitumen if the Fuel Quality Directive is passed, the Canadian government has lobbied against it in a manner one EU politician describes as something never seen before:

“There have been massive lobbying campaigns by the car industry, by the chemicals industry, banks, food giants, etc. But so far I have not seen such a lobbying campaign by any state,” Satu Hassi, a Finnish Member of European Parliament told Reuters in 2012 about the Canadian lobbying against the directive.

7% of EU's Fuel Supply Could be Bitumen by 2020

With the Fuel Quality Directive still in limbo (the last vote on the directive ended in a stalemate), Spanish oil company Repsol’s bitumen shipment will most likely not be the last. Repsol has reportedly been investing in upgrading its refineries to process heavy bitumen. Much like Canada, very few refineries in the EU have the necessary refining equipment to turn bitumen into fuels.

“To the refiner, it’ll just be the price you can get and the product you get after refining it, so they wouldn’t care what the source is. They wouldn’t think about the carbon content at all,” Torbjørn Kjus, an oil analyst at DNB Markets told the RTCC news service.

A report earlier this year by the Natural Resources Defense Council estimates bitumen could make up nearly seven per cent of the EU’s total transport fuel supply by 2020 if oilsands pipeline projects such as Keystone XL in the U.S. and Energy East from Alberta to Saint John, N.B., are approved. Combined, the two TransCanada pipelines could pump approximately two million barrels of bitumen every day. Much of this will be exported out of North America.

Image Credit: Transport Canada

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

In the coming months, European Union environment ministers are set to vote on the proposed Fuel Quality Directive (FQD), which would label tar sands oil as 'dirty' because of its higher GHG emissions in comparison to other fuels, bringing the Harper government and Alberta's years-long lobbying against the law to a decisive point.

As Jason Fekete writes for Postmedia News, this is "a critical few months for the future of Canada's oilsands industry and the environmental movement that has targeted the development."

It's hardly surprising that two senior Alberta government ministers depart Saturday "for a weeklong trip to Europe to trumpet what they say is Alberta and Canada's solid environmental credentials, and have EU countries reject a proposal that would "discriminate" against oilsands-derived fuels," as Postmedia News reports.

Canada has been actively fighting the EU proposal for years now for its labelling of tar sands oil as leaving an especially high carbon footprint. A July 2011 report by environmental group Friends of the Earth Europe documented over 110 lobbying events organized by the Canadian government on the tar sands and FQD between 2009 and 2011.

For example, in October 2011, Natural Resources Minister Joe Oliver wrote to the EU Commissioner for Energy, Gunther Oettinger, warning that "if unjustified, discriminatory measures to implement the FQD are put in place, Canada will not hesitate to defend its interests."

In December 2011, David Plunkett, Canadian Ambassador to the EU, wrote to European Commissioner for Climate Action Connie Hedegaard saying that "Canada will not accept oil sands crude being singled out in the Fuel Quality Directive." He added that the Canadian government would "explore every avenue at its disposal to defend its interests, including the World Trade Organisation."

Hedegaard has called the FQD a "science-based and non-discriminatory proposal," and stressed that “studies on the lifecycle GHG intensity of various fuels have been conducted" for it, in a 2011 letter to Minister Oliver.

A 2013 briefing by Friends of the Earth Europe details more recent instances of Canada's lobbying for the tar sands in Europe, including sending two Albertan government ministers on tour in Europe this January to hand out fliers assuring the 11 countries visited that Canada was showing "global leadership in the fight against climate change" despite leaving the Kyoto Protocol and pushing for the tar sands.

The aggressive lobbying efforts by Canada and its EU supporters like the UK have continued unabated since reduction targets were decided on in 2009, forcing the European Commission to undertake an Impact Assessment on the FQD and delaying the vote on the proposal from June 2012 to later this year.

"It has got to be fair, it can't be discriminatory, and it should be based on the facts and the science – and this is not. This is my definition of bad policy," Minister Joe Oliver said of the FQD in an interview last Friday.

Oliver made a similar claim that the proposal "is not based on science and so discourages disclosures and will not achieve its stated objectives," last month in an email to the Canadian Press.

The repeated refrain from the Canadian government that the FQD is not scientific doesn't address the fact that the proposal is based on a 2011 Stanford University study commissioned by the European Commission. The study found that average lifecycle GHG emissions from tar sands oil are 23 per cent higher than conventional fossil fuels.

Image: 'Upstream greenhouse gas (GHG) emissions from Canadian oilsands as a feedstock for European refineries,' by Adam R. Brandt.

Since then, research by NGO Oil Change International has indicated that emissions from tar sands oil could be even higher than thought before, because of emissions released by the burning of tar sands refinery byproduct petroleum coke, or petcoke, which is also used as a cheap fuel.

According to the Stanford study, "GHG emissions from oil sands production is significantly different enough from conventional oil emissions that regulatory frameworks should address this discrepancy with pathway-specific emissions factors that distinguish between oil sands and conventional oil processes."

The Pembina Institute also published a June 2013 report confirming that "average oilsands production is significantly more GHG-intensive than conventional oil production," and calling tar sands GHG emissions "the fastest growing source of climate change pollution in Canada."

The FQD sets a mandatory six percent reduction in GHG emissions from transport fuel suppliers by 2020, and assigns default emission values to different fossil fuel feedstocks (the raw material from which the fuels are made).

Tar sands oil production requires more energy than conventional fossil fuels because of its extraction and refining process from bitumen. Because of this, the FQD would give tar sands oil a higher default emission value, making it unattractive to European fuel suppliers, who would be hit with financial penalties and higher carbon offsets if importing it.

The Harper government's plan of making Canada a global energy superpower by opening up the tar sands oil reserves via international trade would be adversely affected by the FQD, which guarantees that the federal government and the Albertan oil industry will continue lobbying against it, and for the tar sands, in full force in the months to come.

Postmedia News reports that EU environment ministers are set to vote on the FQD in mid-October or mid-November. If approved, the proposal would need to be ratified by the European Parliament in 2014.

Image Credit: Pembina Institute / Flickr  

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.