New figures revise upwards expected tar sands flow to Europe

Fri Jan 24, 2014 5:24am EST

* EU leaning towards scrapping transport emissions goals

* Canada building pipelines as it seeks new outlets

BRUSSELS Jan 24 (Reuters) - New pipelines mean around 30 times more tar sands oil is likely to make its way to Europe than previously thought unless the European Union revives rules that would limit its use, figures showed on Friday.

The data from the Natural Resources Defense Council (NRDC), a U.S. environmental group, follows the publication of revised EU energy and environment policy for the next decade that drops specific goals on cutting the emissions of transport fuel.

The NRDC said between 5.3 and 6.7 percent of Europe's crude oil and transport fuel would come from Canadian tar sands by 2020, compared with a forecast from the European Commission - the EU executive - of 0.2 percent.

The extra market share would delight Canada, anxiously seeking new outlets for its oil as the United States increasingly uses its own resources instead, but for Europeans it would add to the challenge of lowering EU carbon emissions.

The report, released in Brussels on Friday, says the extra equates to putting 6 million more cars on Europe's roads.

So far, Europe has imported insignificant amounts of oil derived from tar sands, which releases more carbon over its life-cycle than conventional oil because of the energy required to extract it.

As it seeks to shift to a lower-carbon economy, the Commission proposed a law, the fuel quality directive, to label energy forms according to carbon intensity and to guide member states as they try to cut transport emissions by 6 percent.

The fuel quality directive has yet to take full effect after years of forceful lobbying against it led by Canada.

The country is working on new export routes, such as TransCanada's Energy East pipeline, which could carry 1.1 million barrels per day to eastern ports, ready for shipment to Europe.

Those supplies would add to exports of fuel refined from oil sands that reaches Europe via the U.S. Gulf Coast.

The 6 percent cut is part of an overall EU goal to reduce carbon emissions by 20 percent versus 1990 by 2020, which is likely to be met.

But for the next decade of emissions-cutting to 2030, the Commission has said there should be fewer targets. This week it proposed just one overall greenhouse gas target, leaving out any specific goal for transport.

Environmentalists and some sections of business are unhappy with the omission.

The biofuels industry in Europe, for instance, sees transport sub-targets as vital incentives to its growth, while oil companies, many of which are active in developing Canada's tar sands reserves, have consistently opposed them.

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