EU warming to oil sands
Claudia Cattaneo Jun 15, 2012
Keith Morison for Financial Post
"We are not banning the import of certain types of oils in the EU," European Union trade delegate Maurizio Cellini says.
When the European Union seemed poised to push forward last year new rules affecting fuels used for road transport, Canada pushed back, fearing the rules would unfairly discriminate against the oil sands and set a dangerous policy precedent. The clash threatened to derail negotiations for an ambitious trade deal between the EU and Canada. Maurizio Cellini, head of economic and commercial affairs at the EU delegation in Ottawa, spoke with Claudia Cattaneo, the Financial Post’s Western Business Columnist. He said it was never the EU’s intention to discriminate against Canada’s oil sands and that negotiations for a trade agreement are on track and could be completed by the end of the year.
Q How does the fuel quality directive fit into the EU’s agenda on the environment?
A It’s just an element in the array of instruments that have been adopted or are still in the process of being adopted to get to ambitious goals of reducing greenhouse gas emissions. There is an overall strategy by the EU to combat climate change.
The EU is still committed to the Kyoto arrangement, and we decided to reduce substantially greenhouse gas emission. The fuel quality directive is about fuel, generally for road transport, so it’s only a part of the equation.
In the EU, greenhouse gas emissions from road transport account for about 20% of the overall greenhouse gas emissions, so it’s a sizeable part. We also believe that we have to go toward a change in our way of producing and using energy sources. In the long term, it’s in the interest of everybody to find better, greener technologies, which may become as well a very important economic area of development, of the creation of new jobs.
‘I think the lobby effort of the Canadian authorities has raised the level of knowledge and awareness about this problem’
Q This directive got Canada’s attention because of concern it would single out and discriminate against the types of oils that are increasingly produced here. Was this the plan?
A No, it was not the plan. The plan is to reduce the greenhouse gas emissions from fuel used in road transport. There wasn’t any intention to be discriminatory against one country or another, or against one source of energy or another. But if you look at the life cycle of a fuel, there are fuels that produce more greenhouse gas emissions than others. So if there is discrimination it is with respect to certain feedstocks, but not against a country, not against a particular area of the world. It happens that Canada holds large reserves of oil from the oil sands, and that according to scientific evidence, which is shared by Canada and Alberta authorities, it produces a certain level of greenhouse gas emissions that is higher than traditional crude. What we have proposed are default values, but if it can be shown the level is lower, we are ready to accept the lower values if proved scientifically.
Q Where is the initiative now in the EU process?
A There was a vote by the member states within a committee – and the end result was that the EU Commission has taken a decision to do a full impact assessment of these measures, which is underway at this moment, and on the basis of results of this impact assessment the commission will make a new proposal at the beginning of next year. The impact assessment will look more deeply into the economic impact, because it might have an impact on the economy, the cost of fuels, on the bureaucratic burden. There was a concern by certain member states about the feasibility and applicability of the directive. The impact assessment will have to take all this into account, and with respect to the scientific evidence, we are constantly open to take into consideration new evidence.
Q Meanwhile, will decision makers in the EU be open to finding out more about the oil sands and the progress that is being made?
A We have contacts with people here, but what is also important is that the Canadian mission in Brussels has done an excellent job to try to raise the awareness of this problem with the European institutions and with the European member states. So, I believe that there is no lack of knowledge at this stage. I think the lobby effort of the Canadian authorities has raised the level of knowledge and awareness about this problem. The situation at the moment is quite clear and quite understood.