EU to soften fuel quality rules, opening door to oilsands crude: report

OTTAWA—The federal government is saying little on a report that the European Union (EU) is poised to soften fuel quality rules so products made from Canada’s oilsands would not face hefty penalties.

The Financial Times is reporting that EU officials have decided to change a draft of a fuel quality directive, something Canadian officials have lobbied their European counterparts to do.

Proposed EU environmental legislation would have set heavy penalties on petroleum products made from Alberta’s oilsands, citing higher carbon emissions associated with its production.

A story on the Financial Times website quotes EU parliamentarian Chris Davies as saying EU climate action commissioner Connie Hedegaard was outvoted by industrial and trade officials on the commission.

The Times said Hedegaard wouldn’t comment.

A spokesperson for Natural Resources Minister Greg Rickford says he is aware of the media reports, but adds the EU parliament must sign off on the rules so Canada will have to await the outcome.

There has been speculation in Ottawa that the crisis between Russia and Ukraine may have helped Canada’s cause.

Wariness over depending on Russian energy exports has prompted some European countries to look for other sources of oil and gas.

Prime Minister Stephen Harper has suggested that Europe should look to Canada for some of its energy.

It’s not clear how Canada could immediately capitalize on European jitters about energy as there is no easy way to export Canadian oil products across the Atlantic.

Calgary-based TransCanada Corp. has proposed building a pipeline to ship Alberta crude to the east coast, but that has not received approval from all the governments involved.

The Financial Times story said the fuel quality directive is likely to be made public next month in advance of going to EU members for approval.