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Canada ‘threatens EU’ over oil sands move

Canada has threatened to take its oil sands spat with the EU to the World Trade Organisation ahead of a key vote in Brussels on the contentious issue later this week, a report has claimed.

The major North American hydrocarbons producer “will not hesitate to defend its interests” in relation to the proposed labeling by the EU of oil sands – also known as tar sands – as particularly polluting, the Guardian newspaper reported on Monday.

The EU is on Thursday due to vote on the issue of quantifying how polluting Canadian oil sands are, with European markets possibly proving prohibitive for Canada to sell into as a result.

Documents obtained by environmentalist group Friends of the Earth Europe show that Canada’s ambassador to the EU, David Plunkett, wrote in December to Connie Hedegaard, European commissioner for climate action on the issue.

The Guardian quoted Plunkett as writing in the letter: "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."

The EU is looking to brand Canadian oil sands as more polluting than other produced oils as a result of the extraction methods needed which are seen as creating more emissions than conventional drilling. The tentative decision to hit any prospective Canadian oil sands exports to the EU with a higher pollution ranking has already led to some division amongst European governments, with the UK, Estonia and other Eastern European countries already reported to be on Canada’s side in the debate.

The Guardian also reported that Canada’s Minister for Natural Resources, Joe Oliver, wrote in October to the European Commissioner for Energy Gunther Oettinger and vice-president of the commission Catherine Ashton. Oliver wrote, according to the UK newspaper: "If unjustified, discriminatory measures to implement the fuel quality directive are put in place, Canada will not hesitate to defend its interests."

Canada has yet to export crude derived from oil sands to Europe, but government and industry officials worry branding it as much more carbon-intensive than other fuels could set a costly precedent for current or future markets.