However, oil companies would have the option to report the actual carbon intensity of their products, which provides a powerful incentive to corporations whose fossil fuels have below-average emissions to be transparent about their products.
The watering down of the mandatory reporting follows sustained lobbying by the oil industry and Canada, a major tar sands producer, to report only one value for all sources.
‘That is a very strange, unfair and inefficient choice. Imagine the same thing for the car industry; it would mean that if Ford chooses to specialise in SUVs, all the others would have to make up for Ford’s cars’ extra emissions,’ said T&E clean fuels officer Laura Buffet.
T&E argued that, compared with having company-specific carbon values, reporting the average emissions would provide no incentive to move away from highly-polluting fuels and would make compliance costlier.
‘If company-specific values are not mandatory, we must ensure they are an option to reward oil companies for not bringing in high-carbon oil,’ Buffet added.
However, the draft text takes positive steps by calling for the differentiation of oils via their crude trade names. These trade names would give an indication of the origin of the oil and, indirectly, of the initial fields where the crude has been extracted.
Crude trade names are already being reported by refineries in California under the US state’s Low Carbon Fuels Standard, a law requiring transport fuel suppliers to reduce the carbon intensity of their products by 10 per cent by 2020.
The debate about classifying unconventional oil such as tar sands, oil shale and coal-to-liquid as particularly dirty dates back to 2009 when all EU states approved a law aimed at reducing emissions from transport fuel sold in Europe by 6% by 2020. As such, the law does not single out one specific source of oil but attempts to differentiate among all the different sources of petrol and diesel, based on their different carbon intensities.
The official Commission study assumes that on average tar sands produce 23 per cent more CO2 emissions than conventional oil while oil shale is on average 50 per cent more polluting.
In Europe, news of the Commission’s plan emerged as the EU received the first major shipment of Canada’s tar sands. Demonstrators opposed the importation of 600,000 barrels of heavy blend crude by the Spanish oil company Repsol to the port of Bilbao.
Currently around 4,000 barrels per day (bpd) of tar sands are imported by the EU, but this is projected to hit 700,000 bpd by 2020 if two major planned pipelines – Keystone XL linking Alberta, Canada, to Texas and Energy East linking Alberta to the East coast of Canada – go ahead.
