A European Union plan to label crude from oilsands as highly polluting in its fight against climate change has been abandoned after years of opposition led by major producer Canada.
A proposal published by the European Commission on Tuesday removes an obstacle to Canada exporting oilsands crude to Europe and comes at a time when tensions between the EU and top oil supplier Russia are running high.
EU sources, speaking on condition of anonymity, said the desire for a trade deal with Canada had been a factor given the situation with Moscow.
Confirming a draft seen by Reuters in June, the proposal requires refiners to report an average emissions value of the feedstock used in the products they produce, dropping a requirement to single out oilsands content.
Extracting oil from the clay-like tar sands requires digging in open-pit mines or blasting with steam and pumping it to the surface, meaning it uses more water and energy and emits more carbon dioxide than conventional crude production.
The revised plan still proposes a method to assess the pollution levels of various fuel types over their life cycles and the European Commission said it would propose action if these were incompatible with climate goals.
Environmental campaigners and Green politicians criticized what they saw as a step backwards. Greenpeace accused the European Commission under outgoing President Jose Manuel Barroso of putting trade ahead of the environment.
Debate over labeling oilsands began in 2009 when EU member states approved legislation aimed at cutting greenhouse gases from transport fuel but failed to agree how to implement it.
In 2011, the Commission agreed oilsands should be given a carbon value a fifth higher than for conventional oil, but member states again could not agree on the plan.
After an inconclusive vote by member states in 2012, the Commission said it would carry out an assessment of the financial impact of the legislation.
One official argued at the time that such a review would ultimately make the planned law stronger not weaker.
Oilsands crude is being exploited by major oil firms such as BP Royal Dutch Shell and ExxonMobil.
Environmental campaigners say exploiting these reserves will make it very difficult to meet goals to avert the most devastating impact of global warming.
In the context of the Ukraine crisis and concerns about Europe's energy security, Canada had argued Europe should embrace its oil as a secure source of energy.
Canada's natural resources minister last November also warned the EU's bid to label tar sands crude "highly polluting" could "stigmatize" such oil and make it harder to export.
