The European fuel quality directive: will it stay or will it go?
By Matthew Ducharme
Matthew Ducharme, LLB (Victoria), LLM (Calgary), is the 2012 recipient of the John Ballem QC, LLD Post Graduate Fellowship in Energy Law.
On February 23, 2012, a European Union (EU) drafting committee voted on a draft law that discriminates against bitumen. This was the Draft Implementing Measure to the European Union Fuel Quality Directive (Implementing Measure). The Canadian press reported the vote ended in a stalemate. The press also noted that the law would be reconsidered in the late spring or early summer (National Post; CBC; Globe and Mail).
If the EU enacts the law it will have made a step in its fight against climate change, but the market for bitumen may be negatively impacted. If the law dies, Canada can expect a higher price on the sale of its bitumen in overseas markets. This note examines the February 23 vote within the EU law making process.
To put the vote in context, it is important to understand the nature of bitumen, life-cycle emissions, EU climate change policy and the substance of the draft law. This note also includes a sketch of whether or not a trade law challenge by Canada would be successful.
In short, the result of the vote is a procedural victory for Canada’s stated policy of protecting bitumen markets. The result of the vote makes it possible for the European Council, a small body relative to the European Parliament and therefore more easily lobbied, to block enactment of the law without providing a justification. If the law is enacted, Canada cannot be assured of defeating it under international trade law.
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