The European Union appears to have backtracked on a proposed policy that would have discriminated against oil produced from Alberta's oilsands.

Last fall, the EU released draft guidelines that distinguished between fuel derived from the oilsands and from conventional sources as part of efforts to fight climate change.

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Documents obtained by The Canadian Press suggest the EU changed its oilsands-derived fuel policy after heavy lobbying by Ottawa.

That distinction would have allowed regulators in the 27 EU member countries to penalize users of oilsands-derived fuel or reward non-users.

Environmentalists who have seen the most recent draft of the guidelines say that distinction is now gone.

Documents obtained by The Canadian Press suggest the change came as a result of heavy lobbying by the federal government.

"Mainstream crude oil sources, from light to heavy, including oilsands crude, all have similar life cycle (greenhouse gas) intensity," said a letter from a Natural Resources Canada official to the head of the EU's environment unit and obtained by the news agency.

The letter said that, once it is used in a vehicle, oilsands-derived fuel emits only five to 15 per cent more carbon dioxide than conventional crudes.

Making a distinction could be difficult

Ross Hornby, Canada's ambassador to the EU, argued in another letter to the group's director-general of environment that distinguishing between oilsands fuel and other fuels would be difficult and expensive.

"Such a system would be extremely difficult to implement and monitor and would in itself create barriers to trade, particularly in light of the highly integrated nature of the North American oil industry," he wrote.

Environmental groups say they hope the draft guidelines, which haven't been publicly released, could still be changed back to their original form to discourage the use of oilsands-derived fuel. They say oilsands crude production results in unacceptable levels of greenhouse gases.

"The powerful oil lobby has the Canadian government doing its dirty work again," said Sierra Club head John Bennett. "It is bad enough that our government has absolutely no policies on climate change or to curb pollution, but now they are interfering in foreign governments' environmental policies."

Twelve environmental groups have sent a letter to EU Commissioner Connie Hedegaard, asking for the distinction to be restored.

"Extraction and processing practices show enormous variations in carbon footprints and therefore offer huge potential for emissions reductions," the letter said.

With files from The Canadian Press