The European Commission has decided to carry out a full study into the impact of proposed fuel quality laws on business and markets, delaying until next year any ruling on how to rank the polluting effect of crude from oil sands, an EU official said.
Ministers had been expected to vote on the regulations in June as part of EU efforts to reduce greenhouse gas emissions.
But the official, who spoke on condition of anonymity, said EU member states would not be asked to decide until early 2013 on the scheme, part of the EU’s Fuel Quality Directive, which would rank oil sands crude as more polluting than other fuels.
The fuel ranking plan has triggered intense lobbying from Canada, one of the world’s largest oil sands crude producers, as well as opposition from some EU member states whose oil firms are active in such unconventional crudes.
The impact assessment will analyze the consequences of the law on fuel suppliers and other stakeholders, the source said.
“The proposal will not be submitted to the (European) Council before early 2013,” an EU source said, referring to the body that brings together EU member governments.
“We have decided to have an impact assessment before submitting the proposal to the Council,” said the source.
EU member states approved the Fuel Quality Directive in 2009, with the aim of cutting greenhouse gases from transport fuel production by 6 percent by 2020, as part of a wider set of green goals.
But intensive lobbying meant it was not until October last year that the Commission proposed detailed rules for implementing the law.
They include reporting requirements and carbon emission “default values” for difference kinds of fossil fuels for ranking the fuels by their overall greenhouse gas output.
Oil sands crude have been ascribed a value of 107 grams per megajoule of fuel, making it clear to buyers that it had more impact than average crude oil at 87.5 grams.
A series of technical meetings culminated in February in failure to agree on the plan.
Both Canada and the European Commission declared victory, with EU Climate Commissioner Connie Hedegaard saying at the time that she had feared outright defeat as a result of lobbying.
The EU source said on Friday that the decision to carry out an impact assessment was intended to win over waverers.
“We did not have a qualified majority against or in favour. We want to gain the support of those who are in doubt,” the source said.
“The idea is to address a number of concerns raised by stakeholders and member states.
“I can’t pre-empt the result, but we’re confident it will be favourable. We’re totally committed to getting this proposal through.”
Impact assessments, carried out by independent analysts, are a standard procedure in EU law-making, but the Commission had thought it unnecessary in ranking fuels because it was only the means of implementing a directive that had already been agreed.
The lobbying, however, was so extensive, the EU source said, there was a feeling in the Commission it would be a way to muster support.
Canada has argued the draft law is unfair to Canadian oil and that other fuel sources are also carbon intensive. The oil industry as a whole has said it would be an excessive administrative burden, potentially extremely negative for already struggling EU refineries, for instance.
An independent report carried out by a group of consultancies and published early this week found the cost would be negligible, although over time the law could discourage investment in the most carbon-intensive sources of crude, which environmental campaigners say is entirely appropriate.