Canada to Fight EU Proposal Labeling Tar Sands as Dirty

The EU has proposed labeling Canada’s tar sands as “dirty” which would result in an import tax on Canadian bitumen. If the proposal is successful, EU refiners who use Canadian tar sands crude would face extra costs as they are required to cut carbon content in fuels by 6 percent or pay a penalty.

The Europeans did not flinch when confronted by threats of a trade war from a Canadian cabinet minister. Canada’s Natural Resources Minister, Joe Oliver, said Wednesday Ottawa would consider launching a complaint with the World Trade Organization (WTO) if the EU proceeds with a fuel-quality directive that singles out crude from Canada’s oil sands as harmful to the planet’s climate.

If the trade referee were to side with the Canadian federal government he could grant Ottawa the authority to retaliate by slapping punitive tariffs on European imports.

However the Europeans do not think that Canada’s case will sway the WTO. The European Union ambassador to Canada, Matthias Brinkmann, told reporters in Ottawa on Thursday that he believes the WTO would find no fault with the fuel-quality directive.

Mr. Oliver later said in a phone interview. “We’re going to defend our interests.” Although he did not specify whose interests he is defending.

The science on the dirty emissions profile of extracting and refining the tar sands is widely understood. It is hard to imagine how the WTO could ignore the veracity of the European claim. The ruling Canadian Conservatives appear to be fighting a losing battle to get the EU to back down.