Canada pushes back in EU oilsands trade spat

Canada's natural resources minister is criticizing the European Union over its plan to discriminate against Canadian oil derived from Alberta's oilsands.

Canada's natural resources minister is criticizing the European Union over its plan to discriminate against Canadian oil derived from Alberta's oilsands.

Joe Oliver released a letter Sunday to EU energy commissioner Gunther Oettinger in which he lambastes the EU's fuel quality directive — a proposal that ranks fuels based on their carbon footprint, and suggests ranking Canadian oil derived from oilsands in a separate category because it is perceived to be so dirty.

Oliver said the EU classification would not single out other sources of oil which are known to produce similar or higher amounts of greenhouse gas emissions as Canadian oilsands oil.

"Any proposed implementing measure that provides separate, more onerous treatment for oilsands derived crude oil relative to other crude oils with similar or higher GHG emissions intensities is discriminatory, and potentially violates the European Union's international trade obligations," Oliver said.

The letter did not specifically state what Ottawa might do if the EU pushes forward with the proposal as it currently stands.

Oliver said Canada is being punished for having a higher quality of data and transparency with regard to the supply chain of its crude oil. "[Other] countries that fail to provide such information are assumed to have low GHG emissions," Oliver said.

Oliver warned that the EU proposal could discourage other countries from implementing more stringent carbon reporting programs.

Canada does not currently export much oil to the EU. But the tone of Oliver's letter suggests federal officials are eager to resolve the matter and ensure Canadian oil isn't put at a competitive disadvantage.

"If unjustified, discriminatory measures to implement the FQD are put in place, Canada will not hesitate to defend its interests," Oliver said.

The trade spat is set against the backdrop of negotiations between Canada and the European Union over a wide-ranging free trade deal. Oliver said he plans to discuss the matter further during meetings with his European counterparts this week.

 In 2009, the EU banned imports of Canadian seal products because of opposition to the seal hunt.