EU vote on tar sands law expected on February 23

BRUSSELS Tue Feb 14, 2012 12:19pm GMT

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BRUSSELS (Reuters) - European Union officials are expected to vote on February 23 on a draft law that would label fuel produced from tar sands as more polluting than that from other forms of oil, according to a draft agenda seen by Reuters.

The proposal from the EU's executive to include tar sands in a ranking designed to enable fuel suppliers to identify the most carbon-intensive options has stirred up intense lobbying by Canada.

Home to the world's third-largest oil reserves, almost all of which are in the form of tar sands, also referred to as oil sands, Canada has argued the EU is unfairly discriminating against it.

Previous EU meetings have repeatedly failed to get as far as a vote, but the agenda for a fifth meeting of the fuel quality committee later this month schedules a vote on an amendment to the Fuel Quality Directive proposed by the European Commission.

EU sources close to the talks said a stalemate is likely, with no majority either way.

That would mean the debate is transferred from the level of EU technical experts to open discussion among EU ministers, and the Commission could decide to amend its proposal.

"It's very unlikely to get a qualified majority, which means that this will go the Council," one source said, speaking on condition of anonymity.

EU ministerial talks are also be expected to be difficult as objections to ranking tar sands as more polluting have also stirred opposition in some European nations, where oil majors active in Canada such as Royal Dutch Shell, BP and Total are based.

Environmentalists say there is a body of scientific evidence supporting the EU view that oil sands crude is more carbon-intensive than oil from other sources and that a shift to greener forms of energy should avert the need to extract every last drop of oil.

The oil industry has argued the proposed law could create an unreasonable administrative burden.

Together with Canada, it has also argued that tar sands are a crucial source from a politically stable nation, which is not a member of cartel the Organization of the Petroleum Exporting Countries, and that the world will remain dependent on fossil fuel for decades.

Under the draft EU proposal, tar sands are assigned a default greenhouse gas value of 107 grams of carbon per megajoule, informing buyers it has more climate impact than conventional crude with 87.5 grams.

If finalized, the ranking would complete legislation introduced in 2008, when the EU agreed to reduce the carbon intensity of its transport fuels by 6 percent by 2020 as part of wider goals to cut carbon emissions by 20 percent by 2020.

(Reporting by Barbara Lewis, editing by Charlie Dunmore and Jane Baird)

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