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BRUSSELS (Reuters) - Years of fierce lobbying against draft EU rules that would label fuel from tar sands as more polluting than from other sources produced a stalemate on Thursday when a committee of technical experts failed to agree on the proposal.
The European Union's executive and environmentalists say the "dirty" label is necessary to help fuel buyers choose the least carbon-intensive energy forms and help to curb global warming.
Canada, home to massive crude reserves most of which are in the form of very heavy crude known as tar sands or oil sands, has challenged the EU law, saying it is discriminatory and could damage trade ties.
Thursday's vote at a closed-door meeting of technical experts failed to reach a qualified majority under the EU's voting system, which weights voting to reflect the populations of the EU's member states.
Climate Commissioner Connie Hedegaard said it was a victory against the tar sands lobbyists that it had not been a "no vote."
"With all the lobbyism against the Commission proposal, I feared that member states' experts would have rejected the proposal in today's experts committee. I am glad that this was not the case," Hedegaard said in a statement.
"Now our proposal will go to ministers, and I hope governments will realize that unconventional fuels of course need to account for their considerably higher emissions through separate values."
Ministers are expected to take a decision on the issue in June.
Canada does not directly sell its crude to Europe, although the EU receives some fuel imports that are refined from Canadian oil in the United States.
Its concern is more about the damage to the image of tar sands and the impact on future sales that could result from the EU's planned law.
Within the European Union, Canada has found some support in Britain and the Netherlands, both of which have stakes in Royal Dutch Shell, one of the firms active in tar sands, along with Total of France.
They were among those nations to abstain on Thursday, an EU source said on condition of anonymity.
No-voters included Estonia, home to shale oil, which would also be labeled as carbon intensive, and Poland, which could be concerned that its reserves of shale gas, another unconventional energy source, might at a later date come under scrutiny.
There were 54 votes in favor of the proposal, 128 votes against and 128 abstentions, which means there were not enough yes or no votes to result in a majority.
Firm backing for the European Commission's proposal, under the Fuel Quality Directive, has been led by nations such as Denmark, holder of the current EU presidency and a keen advocate of environmental reform.
The directive's overall goal is to reduce the carbon intensity of transport fuels by 6 percent by 2020 as part of wider goals to cut carbon emissions by 20 percent by 2020.
As a means to that end, it assigns greenhouse gas values to a series of fuels, including those derived from tar sands.
Tar sands are assigned a default greenhouse gas value of 107 grams of carbon per megajoule, informing buyers it has a greater climate impact than conventional crude with 87.5 grams.
"If people want to use tar sands, it will be more difficult to achieve the target of reducing greenhouse gases by 6 percent," Peter Willumsen, head of section at the Danish energy agency, told Reuters television on arrival for Thursday's meeting at an anonymous Commission building in Brussels.
Slovakia also supported the directive.
"Your children will give you the answer," Matiaz Ferjancic, Slovakia's technical representative at the meeting, said when asked why.
Additional reporting by Charlie Dunmore and Marine Hass, editing by Jane Baird