EU fuel directive flawed: study
Canada-funded report says it targets oilsand
A report paid for by the federal and Alberta governments supports their view that the proposed European Union fuel quality directive unfairly singles out Canada’s oilsands for discriminatory treatment.
The study by ICF International being released Wednesday morning is to be used as ammunition by Natural Resources Minister Joe Oliver in an upcoming European trip to argue the directive should be rewritten.
“The FQD groups almost all crudes currently used in the EU in the ‘conventional’ category, regardless of GHG intensity, and arbitrarily places Canadian oilsands into a separate stand-alone category with a higher, discriminatory GHG intensity value,” reads an executive summary of the report by ICF International being released Wednesday morning.
In an accompanying statement, Oliver said the study proves that the proposed directive’s implementation measures are “unscientific and discriminatory” and would “discourage disclosure, harm the European refinery industry and not achieve its environmental objective.”
He said ICF International is one of the European Commission’s own expert consultants.
Ministry officials said the study cost $170,755, of which $50,000 was contributed by Alberta.
Oliver said last week EU environment ministers could take the fuel quality directive to a vote early as mid-December but it could also potentially be delayed until 2014.
The Harper government commissioned the independent assessment designed to analyze the carbon content of European fuels earlier this year.
The directive aims to reduce the EU’s greenhouse gas emissions from fuel by six per cent by 2020, compared to 2010 levels.
It puts crude into three categories according to greenhouse gas emission intensity — conventional, oil shale and oilsands natural bitumen.
The study concludes that oilsands-derived crude in many cases produces the same or less emissions than some of the crudes in the conventional category, such as heavy and light crudes with significant flaring and venting produced in countries such as Venezuela, Iraq, Nigeria and Russia.
“By singling out the oilsands and arbitrarily assigning a higher GHG emissions value, the FQD would discriminate against Canada by discouraging EU refiners and consumers from using Canadian crude oil and products, thereby negatively impacting Canada’s energy sector and disadvantaging European industry,” it says.
The report calls for the directive to be rewritten, warning that it could actually lead to higher greenhouse gas emissions by increasing the distance oil is transported to market.
It recommends that the directive implementing measures consider the emissions intensity of each crude oil imported into Europe individually, according to their range of GHG intensities.
It says the “conventional” default value is too low and based on out-of-date data with flaws such as relying on voluntary rather than mandatory reporting.
It suggests the data underestimates how much greenhouse gas is emitted in countries with oil production but limited gas gathering, leading to higher venting and flaring rates.
ICF International says that if the conventional crudes were accurately estimated, their default value would be 10 per cent higher and that would place the value of oilsands at about 10 per cent higher than the top of the conventional ranges, rather than 22 per cent higher as it is in the proposal.
Oliver met with the United Kingdom’s secretary of state for energy and climate change, Edward Davey, in Washington last week.