* EU source says Commission committed to getting law passed
* Canada, with backing from some EU states, lobbied hard
By Barbara Lewis
HORSENS, Denmark, April 20 The European
Commission has decided to carry out a full study into the impact
of a proposed fuel quality law on business and markets, an EU
official said, delaying until next year any ruling on oil from
tar sands after intense lobbying by Canada.
Ministers had been expected to vote on the law in June, in
line with EU efforts to reduce greenhouse gas emissions.
But the official, who spoke on condition of anonymity, said
EU member states would not be asked to decide before early 2013
on the scheme, part of the EU's Fuel Quality Directive, which
would rank tar sands oil as more polluting than other fuels.
Canada, which has opposed the ranking proposal, sits on the
world's third-largest crude reserves after Venezuela and Saudi
Arabia. The vast majority of Canada's oil is in the form of
unconventional crude including tar sands.
A Commission impact assessment will analyse the consequences
on stakeholders such as major oil firms Royal Dutch Shell
, Total and BP and refineries.
"The proposal will not be submitted to the (European)
Council before early 2013," the EU source said, referring to the
body that brings together EU member governments.
"We have decided to have an impact assessment before
submitting the proposal to the Council," said the source.
POLLUTING VALUES FOR FUELS
EU member states approved the Fuel Quality Directive in
2009, with the aim of cutting greenhouse gases from transport
fuel production by 6 percent by 2020, as part of a wider set of
But intensive lobbying meant it was not until October last
year that the Commission proposed detailed rules for
implementing the law.
They include reporting requirements and carbon emission
"default values" to rank different kinds of fuels by their
greenhouse gas output over their wells-to-wheels life-cycle.
Tar sands have been ascribed a value of 107 grams per
megajoule of fuel, making it clear to buyers that it had more
impact than average crude oil at 87.5 grams.
Other unconventional sources, such as oil shale found in EU
member Estonia, are also given a relatively high value.
A series of technical meetings culminated in February in
failure to agree on the plan.
Both Canada and the European Commission declared victory,
with EU Climate Commissioner Connie Hedegaard saying at the time
that she had feared outright defeat as a result of lobbying.
The EU source said on Friday that the decision to carry out
an impact assessment was intended to win over waverers.
"We did not have a qualified majority against or in favour.
We want to gain the support of those who are in doubt," the
"The idea is to address a number of concerns raised by
stakeholders and member states," the source added.
"I can't pre-empt the result, but we're confident it will be
favourable. We're totally committed to getting this proposal
Impact assessments, carried out by independent analysts, are
a standard procedure in EU law-making, but the Commission had
thought it unnecessary in ranking fuels, because it was only the
means of implementing a directive that had already been agreed.
The lobbying, however, was so extensive, the EU source said,
there was a feeling in the Commission that the measure would be
a way to muster support.
Canada has argued the draft law is unfair to Canadian oil
and that other fuel sources are also carbon intensive. The oil
industry as a whole has said it would be an excessive
administrative burden, potentially extremely negative for
already struggling EU refineries, for instance.
An independent report carried out by a group of
consultancies and published early this week found the cost would
be negligible, although over time the law could discourage
investment in the most carbon-intensive sources of crude, which
environmental campaigners say is entirely appropriate.