EU at stalemate on Canada's oilsands ranking

European Union officials are at a stalemate after voting on whether to classify Canada's oilsands crude as more harmful to the environment than other fuelsa proposal that Canada would fight.

The ballot by experts from the EU's 27 member countries, which are weighted by population, failed to produce the required 255 votes needed to approve the classification.

As a result, the proposal moves up to the European Council, which will vote on it in late spring or early summer. If the council votes for the measure to declare Canada's oilsands oil dirty, Canada would likely appeal to world trade bodies.

The EU's so-called fuel-quality directive,part of Europe's attempts to reduce CO2 emissions by encouraging the use of cleaner fuel, ranks fuels based on their overall carbon footprint. It calculates a fuel's entire life cycle of emissions, then assigns it a number.

Connie Hedegaard, the EU's climate action commissioner, defended the intent of theclassification Thursday after thevote.

''The commission identified the most carbon-intensive sources in its science-based proposal," Hedegaard said. "This way, high-emission fossil fuels will be labelled and given the proper value,a value that of course is higher than the value for lower-emitting fuels.

"It is only reasonable to give high values to more polluting products than to less polluting products. I of course hope that the member states will follow the commission on this environmentally sound initiative."

Under the directive, Canadian oil derived from oilsands would get a higher number than conventional oil because it uses more energy to extract and refine.The fuel quality directive would make Alberta's main export more expensive for European customers. Canada doesn't export much oil to Europe but could in the future.

Speaking to Canadian journalists in London later on Thursday, Foreign Minister John Baird said he was "pleased that so many countries oppose this discriminatory measure" and vowed Canadian officials would continue to lobby against it.

"The emissions are very similar to Russian and Nigerian heavy crude," Baird said. "Obviously, we're going to continue to promote Canadian interests. That's our job."

Baird rejected the suggestion that Canada's oilsands tarnish its image internationally.

"As environment minister and as foreign minister I can count on one hand the number of my counterparts who have ever raised the issue of the oilsands," he said. "So while it does get considerable coverage in some quarters, it's not something that's ever raisedvirtually never, in any meetings I had with my international colleagues."

AlbertaPremier Alison Redford said the result of the vote was good news for Alberta, even though the province ships very little crude to Europe.

"I've always said that it mattered to all of us as Albertans what the international community thinks about us," she said. "And there are very important opinion leaders in the European Union. Not one of our largest markets but very important in termsof international dialogue."

Vote neither passed nor failed

The EU assigns votes to each member country depending on its population. For example, Germanyand France each have 29 votes, while Latvia and Slovenia each have four. In the tally of the 345 votes cast Thursday, 89 were for, 128 were against, and 128 were abstentions. With neither side of the issue getting the required 255 to pass or fail, the proposition moves on to the next level for politicians to decide.

The Guardian website reported the following vote breakdown, which was verified by a spokesperson for the EU climate commissioner:

• For: Austria, Denmark, Finland, Greece, Ireland, Latvia, Luxembourg, Malta, Romania, Slovakia, Slovenia, Sweden.
• Against: Spain, Italy, Poland, Bulgaria, Czech Republic, Estonia, Lithuania, Hungary.
• Abstained: U.K., Germany, France, Netherlands, Portugal, Belgium, Cyprus.

In response to the vote, Climate Action Network Canada said theEuropean Union now has a political mandate to act on climate change and should look past Canada's efforts to push oilsands oil at any cost.

"The fact that the proposal is now in the hands of ministers gives politicians in Europe a chance to live up to their climate commitments," said campaign director Hannah McKinnon.

Canadian threat

Canada and the oil industry have lobbied against the proposal, while environmental groups have supported it.

Canada has threatened the EU with action at the World Trade Organization if the bloc's plan goes ahead.

David Plunkett, the ambassador to the EU, wrote in a December letter to the bloc's commissioner for climate action that "Canada would not accept oilsands crude being singled out."

"Canada will explore every avenue at its disposal to defend its interests, including at the World Trade Organization," Plunkett wrote in the letter to Connie Hedegaard, dated Dec. 8, 2011.

Speaking to reporters at an event Thursday morning in Toronto, Finance Minister Jim Flaherty brushed off a question about a potential trade war with Europe, saying the federal government was "encouraged" by the results of the vote. Flaherty suggested"some of the EU countries are taking another look at this potential kind of discriminatory action toward the oilsands and towards Canada."

"We make a point of bringing as many people as possible from around the world to see the oilsands, because when they actually see the oilsands, the reclamation that's been done already in terms of the environment, then they get rather a different picture than they get from the odd Hollywood actor," Flaherty said.