EU delays 'anti-oilsands' fuel quality directive decision

The European Union will delay making a decision on its controversial fuel quality directive (FQD) until early 2013, as the European Commission conducts an impact assessmentfor the proposal.

The European Council the EU body that represents individual countries was set to vote on whether to pass the directive in June, but delayed the decision to allow the Commission the EU's executive body to make a stronger case.

"The Directive will be presented to the Member States in the Council before early 2013 with an even more solid basis for decision," wrote Isaac Valero-Ladron, Climate Action Commissioner Connie Hedegaard's spokesperson.

The FQD was the subject of intense lobbying by the Canadian government and the European oil industry.

Ottawa argued the proposed FQD unfairly discriminates against Alberta bitumen. The oil companies worried the FQD would impose aheavy administrative burden.

This week, a study released by the European environment group, Transport and Environment, rebutted the claims of the oil industry. Their study found the FQD would add one euro cent to the average price of each barrel of oil.

The FQD is intended to help EU member countries hit greenhouse gas targets by assigning values to fuel feedstocks. For instance, oilsands oil gets a higher value than traditional crude oil.

The Canadian government calls the system "discriminatory and non-science based."

Natural Resources Minister Joe Oliver was happy with the delay.

"We are not opposed to the goal of the fuel quality directive. However, we remain strongly opposed to Canadian oilsands crude being unfairly discriminated against. Canada wants to ensure that any directive or policy that emerges in regard to the fuel quality directive is fair," Oliver said in a statement.

Oliver has asked one of his senior officials to meet with the Europeansnext week to offer Canada's co-operation and to get more information.

Canadian environmentalists also applauded the decision to do an impact assessment.

"The European Commission is clearly committed to their science based proposal," Hannah McKinnon of Climate Action Network Canadasaid in a note to CBC News.

"This decision calls big oil and the Canadian Government's bluff. It will put an end once and for all to the disingenuous claims around the science and the cost that are getting in the way of Europe's efforts to do its part when it comes to reducing their greenhouse gas pollution," McKinnon said.