Canada Threatens EU with Trade War over Oil Sands Ban

The European vote on the 23rd February which could potentially classify Canada’s oil sands as highly polluting and effectively ban their trade with the EU, has attracted angry retaliations from Canadian officials. Canada fears that the EU Fuel Quality Directive (FQD) could set a precedent to other countries around the world, affecting the exports of its tar sands.

Canada’s oil minister, and David Plunkett, ambassador to the EU, sent some letters to the European Commission threatening, "Canada will not hesitate to defend its interests, including at the World Trade Organisation."

Darek Urbaniak of Friends of the Earth condemned the letters as “further evidence of Canadian government and industry lobbying, which continuously undermines efforts to combat climate change. We find it unacceptable that the Canadian government now openly uses direct threats at the highest political levels to derail crucial EU climate legislation.”

Blunkett wrote to Connie Hedegaard, the European Commissioner for climate change to say that, "if the final measures single out oil sands crude in a discriminatory, arbitrary or unscientific way, or are otherwise inconsistent with the EU's international trade obligations, I want to state that Canada will explore every avenue at its disposal to defend its interests, including at the World Trade Organisation."

An official from the Canadian government attempted to justify his countries stance by saying that, “we oppose an FQD that discriminates against oil sands crude without strong scientific basis. The oil sands are a proven strategic resource for Canada; we will continue to promote Canada's oil sands as they are key to Canada's economic prosperity and energy security.”

Quite rightly the European Commission disputes the claim that their votes will not be based upon scientific evidence. As Colin Baines, the toxic fuels campaign manager at the Co-operative, said, “there is a wealth of independent science stating that tar sands fuels emit significantly more carbon than conventional oil, no matter how many briefings Canada gives claiming otherwise.” He added that, "the Canadian government's aggressive lobbying and attempted intimidation of the EU is making it look increasingly desperate. But its threat of a WTO challenge faces one massive problem: tar sands oil is not a 'like product' with crude oil, so no unlawful discrimination exists under WTO. The EU must adhere to the science and penalise the higher emissions."

By. Charles Kennedy of Oilprice.com