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Big Oil dilutes EU dirty fuel law

After five years of heavy-handed lobbying by Canadathe US and oil majors, the European Commission today published fuel quality rules that fail to discourage oil companies from using and investing in the world’s dirtiest oil such as tar sands and coal-to-liquid.

Agreed in April 2009, the Fuel Quality Directive (FQD) for the first time obliges fuel suppliers in Europe to reduce the greenhouse gas (GHG) intensity of transport fuel by 6% by 2020. The law lacked rules on how to account for GHG emissions from different sources of crude oil, which represents 95% of EU’s transport fuel market, and electricity. This meant that the enacted target could only be met with biofuels.

The European Commission has adopted a proposal to implement existing obligations in the 2009 amendment of the Fuel Quality Directive, reads a DG Clima press release. Article 7a of the Fuel Quality Directive obliges suppliers to reduce by 6% the life cycle greenhouse gas intensity of fuel and other energy sources supplied for use in road vehicles by 2020. The Directive also obliges suppliers to report information on the greenhouse gas intensity of the fuel they supply to authorities designated by the Member States. The proposal establishes the low-carbon fuel standard required by the Fuel Quality Directive and brings it into effect in Union legislation.


EU Climate Action Commissioner Connie Hedegaard said: “Finally the Commission can present this proposal to improve the climate impact of our transport fuels. It is no secret that our initial proposal could not go through due to resistance faced in some Member States. However, the Commission is today giving this another push, to try and ensure that in the future, there will be a methodology and thus an incentive to choose less polluting fuels over more polluting ones like for example oil sands. I strongly recommend Member States to adopt this proposal and keep the safeguards that will allow cleaner fuels to be used in transport across Europe”.     

The proposal establishes a method for calculating the carbon intensity for different fuel types, namely petrol, diesel, Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG). Each of these fuel types will be assigned a default value based on emissions produced over its entire life-cycle. From now on, suppliers will have to use these values when reporting the carbon intensity of their fuel supply to Member States to ensure a 6% reduction in their transport emissions in 2020.

To increase transparency regarding the type and origin of fuels being used in EU road transport, more stringent reporting rules are being put in place. This information will be reported by suppliers to Member States and by Member States to the Commission and will lead to better understanding of the fuel mix used by road vehicles in the EU.

The new methodology and strengthened reporting are also expected to lead to market signals that will ensure the 6% GHG reduction target is achieved. This means that any potential increase in the volume of high carbon intensity crudes (such as oil sands), as compared to their 2010 baseline levels, would need to be met by proportional efforts to lower emissions in other areas. This could be achieved through the use of sustainable biofuels and electricity, or for instance, by reducing GHG emissions during fossil fuel extraction.

With this proposal, the European Commission is presenting a simple and effective mechanism to account for emissions from road transport, while ensuring a high level of climate protection. The proposal reflects extensive technical and economic analyses as well as public consultations undertaken by the Commission. These were conducted following Member States’ inconclusive vote on the Commission’s initial proposal in 2011 and required time to conclude before presenting the final proposal. The results of this process are detailed in the impact assessment that accompanies the proposal.

The proposal will now be submitted to the Council for a decision within two months, and to the European Parliament for scrutiny.

The subsequent proposed implementing measures will still encourage the use of electricity in transport and incentivise oil producers to reduce emissions from highly polluting processes such as venting and flaring. The proposal also mandates oil companies to report the origin and trade name of their products, bringing some transparency to this opaque industry.

Reacting to the proposal, Nusa Urbancic of T&E said: “After a five-year siege by Canadian officials and industry lobbyists, the EU is letting oil corporations off the hook. That is not just a tragedy for the climate; excusing the oil industry from carbon reduction efforts is unfair, inefficient, and costly as well.”

Back in 2012 EU environment ministers failed to agree on proposed rules to implement the FQD. The Commission was legally obliged to produce new implementing rules ‘as soon as possible’, but amidst intense lobbying it was delayed by more than 32 months.

Transport is almost entirely dependent on oil: it emits 31% of the EU’s total CO2 emissions and will become the biggest source of climate-changing emissions soon after 2020. The FQD is a key law to promote cleaner transport fuels and is part of the EU’s wider goals to cut carbon emissions by 20 percent by 2020.

Last year, the scientific community wrote to outgoing Commission president Barroso to urge him to go ahead with labelling tar sands and other dirty forms of oil as more polluting than conventional crude, arguing that ‘we cannot burn all of the fossil fuels without causing dangerous climate change’.

“After five years of delay, we will likely end up with a very flawed law that won’t deliver on its original objectives of discouraging high-carbon fuel investment. Despite that, we need to implement it. Starting post-2020 work with a basic tracking system in place is better than nothing,” Nusa Urbancic concluded.

coalition of alternative fuels companies and green NGOs have written to the EU Council, European Parliament and Commission urging them to set an EU binding target to reduce GHG emissions from transport fuels after 2020.

The proposal still needs to be approved by national governments and the European Parliament in the coming months.

Reducing the carbon footprint of fuels used in transport is part of the 2020 Climate and Energy package. It is also an integral part of the action to gradually decarbonise the transport sector in line with the EU’s climate change policy and the Transport White Paper. It is a contribution towards cutting overall greenhouse gas emissions to 20% below 1990 levels by 2020.

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