Canada threatens EU trade war over ‘ dirtier’ oilsands label
OTTAWA — Canada is threatening a potential trade war with the European Union over its attempts to single out oilsands as a dirtier kind of crude, a revelation that comes just days before a crucial vote on the matter.
Newly released documents reveal David Plunkett, Canada’s new ambassador to the EU, has warned European officials the Canadian government will consider an international trade challenge to fight the bloc’s proposed Fuel Quality Directive.
“If the final measures single out oilsands crude in a discriminatory, arbitrary or unscientific way, or are otherwise inconsistent with the EU’S international trade obligations, I want to state Canada will explore every avenue at its disposal to defend its interests, including at the World Trade Organization,” Plunkett said in a letter, sent in December to Connie Hedegaard, European commissioner for climate action.
The warning in the documents, which were obtained by environmental group Friends of the Earth Europe through an access- to- information request, is the latest salvo in a simmering dispute between Canada and the EU over the Alberta oilsands, the third- largest proven oil reserves in the world.
The federal Conservative government and the petroleum sector have been furiously lobbying EU members to convince them to side with Canada’s position that the proposed fuel standard discriminates against the oilsands. Almost all of Canada’s oilsands exports go to the U. S. and virtually no bitumenderived fuels are currently shipped to Europe.
Nevertheless, Canada — which is finalizing a free- trade deal with the EU — is particularly concerned that adopting the fuel standard would set a dangerous dirty oil precedent, damage the oilsands industry’s global reputation and close future energy export markets.
European Union officials are slated to vote Thursday on the draft law that would slap a higher carbon- emissions value on bitumen- derived fuels, compared with more conventional crudes.
Hedegaard’s office said the directive — which also would affect the Venezuelan oilsands — is “clearly science- based” and helps the EU countries meet their international obligations under the WTO.
“We are sending a clear signal to fossil fuel suppliers,” Hedegaard said recently. “As fossil fuels will be a reality in the foreseeable future, it’s important to give them the right value.”
Thursday’s vote is expected to be a close one, although observers doubt the proposal will receive enough support or opposition from the 27 European Union member states to either pass it outright or quash it in the EU’S complicated voting system. If there’s no “qualified majority” at the committee — that’s 255 votes out of a total 345 — then the matter will go to a larger council of ministers of the EU for a vote that could take place by June.