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Climate Change Newsletter: issue 4 — Canada: the EU Fuel Quality Directive — signalling a change of course

By Peter Burn

Recently, the European Union released its 2030 Framework for Climate and Energy. Buried in the details was an indication that the EU is rethinking its proposed Fuel Quality Directive (FQD) — a regulation with the stated objective of reducing the carbon intensity of European motor fuel in 2020 by six per cent relative to 2010 levels. This is welcome news for Canada and, ironically, for the European environment (although not for European environmentalists), since the current FQD proposal contains some major flaws.

First, the FQD is contrary to EU international trade obligations, as well as the UN Climate Change Convention principle that ‘measures should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade’. Most notably, there is no justification for the decision to assign two emissions values for diesel fuel and gasoline — one for fuel made from conventionally produced crudes and a second higher score for fuel made from ‘natural bitumen feedstock source’.

A second major problem is that the FQD won’t achieve its stated 2020 objective. As a result of flawed data and methodology, literally all imported conventional crudes (80 per cent of EU consumption) will enter the EU market with an assigned value that is substantially lower than their actual emissions, particularly those crudes produced with significant gas flaring. As the level of crude imports rises (to replace rapidly depleting ‘cleaner’ North Sea oil), the FQD will show no increase in carbon intensity for statistical purposes, even as it continues to rise in fact. Meanwhile, global greenhouse gas emissions will rise due to higher transportation emissions worldwide caused by ‘market shuffling’…

Click on the link below to read the rest of the Dentons briefing.

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