EU delays green barrier to Canada oil sands: draft

Mon Oct 4, 2010 9:24am EDT
 
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By Pete Harrison

BRUSSELS (Reuters) - Europe has yielded to Canadian pressure by delaying possible green trade barriers to Canada's highly polluting oil sands, but only for one year, a leaked document shows.

Canada has repeatedly warned that draft EU standards to promote greener fuels will harm the market for its oil sands -- tar-like oil that is trapped in sediment and forms the world's second-largest proven crude reserves after Saudi Arabia.

A recent draft of the European Union's "fuel quality directive" calculates greenhouse gas emissions from myriad transport fuels, from hydrogen to diesel, but says oil sands will only be evaluated some time before December 31, 2011 -- a year later than plans made as recently as June.

All other fuels will be dealt with by the end of this year, with the aim of guiding industry on which fuels are best suited to the EU's goal of cutting carbon emissions to one fifth below 1990 levels over the next decade.

The European Union and Canada are in the middle of free trade talks, and the issue of tar sands has become hot.

Relations are already strained after the EU banned imports of seal products last July on animal welfare grounds, a move Canada is challenging at the World Trade Organization.

TRADE BARRIERS

Environmentalists oppose the industry, saying the extra energy needed to extract oil from the north Alberta sands intensifies the damage they do to the climate, while wastes from extraction harm wildlife and pollute rivers.   Continued...