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Syncrude's oil sands plant at Mildred Lake north of Fort McMurray, Alta.Kevin Van Paassen

The European Commission has approved including tar sands in a proposed green ranking of fuels, designed to enable suppliers to identify the most carbon-intensive options, an EU source told Reuters on Tuesday.

Environmental campaigners welcomed the decision, which they saw as a victory for EU Climate Commissioner Connie Hedegaard, who had faced pressure from the oil industry and Canada, home to huge reserves of unconventional oil.

"With this decision the EU is sending a signal to the oil industry that dirty sources of oil should clean up or stay away," said Jos Dings, director of Transport & Environment, a Brussels-based campaign group.

"The Commission, and in particular, the Climate Commissioner Connie Hedegaard should be applauded for not backing down in the face of huge pressure from Canada and the oil industry."

Once the proposal is formally presented by the Commission, EU lawmakers and government representatives are expected to vote on it in the coming months.

The proposal represents the final plank of legislation introduced in 2008, when the EU agreed to reduce the carbon intensity of its transport fuels by six per cent by 2020.

The 2008 fuel quality directive assigns greenhouse gas emissions values for a range of transport fuels, most of which were dealt with by the end of last year.

But a decision on whether to include tar sands was delayed after Canada – home to huge reserves – said the EU's standards to promote greener fuels would harm the market for its oil sands.

The Commission will propose that tar sands should be ascribed a default greenhouse gas value of 107 grams of carbon per megajoule, making it clear to buyers it had a greater climate impact that conventional crude oil, whose value is 87.5 grams.

"Tar sands extraction is a very dirty business for the climate, polluting rivers, lacing the air with toxins and turning forests into wasteland," said Greenpeace EU transport policy adviser Franziska Achterberg.

The EU's executive will also propose a default value of 131.3 grams per megajoule for shale oil, whose use EU member state Estonia has been promoting.

The Commission hopes the inclusion of a default value for shale oil could head off a potential complaint by Canada at the World Trade Organization, by demonstrating that the rules are not designed to discriminate against any single country or fuel.