The European Fuel Quality Directive: Despite a weakened stance on tar sands, new measures take an important step forward on climate policy

This blog was co-drafted with Josh Axelrod, NRDC policy and legal consultant

It is good news that the European Commission has finally published measures that will implement the European Union’s 2009 Fuel Quality Directive (FQD) – a policy that requires European Union member states to lower the carbon intensity of their transport fuel mix by 6% before a 2020 deadline (as compared to a 2010 baseline).  If adopted by member states and the European Parliament, these measures will help set Europe on the right direction toward decarbonizing its transport fuels and cutting its greenhouse gas emissions.  Sadly, the measures introduced last week weren’t as strong as they could have been because the pro-tar sands Canadian government and international oil industry managed to strike certain provisions that would have discouraged increased use of dirty, carbon intensive fuels like tar sands.  Despite this setback in keeping tar sands oil out of Europe, the FQD and its implementing measures are still a solid step forward for European transport and climate policy.

Despite the fact there will not be a mechanism to discourage the use of dirty fuels like tar sands, there will still be a final Fuel Quality Directive that will go before the European parliament.  Passed in 2009, the FQD, which is akin to the California or British Columbia low carbon fuel standards, is one of the many tools developed by the EU to help it meet its 2020 greenhouse gas emission targets.  Since 1990, transport emissions have continued to rise while emissions from other economic sectors in the EU have achieved substantial cuts.

In 2011, the European Commission introduced draft implementing measures for discussion.  Under these earlier draft measures, the FQD’s 6% emissions reduction target could be achieved via several methods, most notably by allowing crude oil suppliers to prioritize low carbon crude oil feedstocks over high carbon feedstocks (like tar sands).  This was far from a “ban” on using tar sands oil in Europe, but it would  have discouraged heavy use of one of the world’s most carbon intensive fuels.  Given the FQD’s emission reduction goals, a method for prioritizing cleaner over dirtier fuel sources appeared to make sense.  But intense lobbying by the Canadian federal government, Alberta’s provincial government, trade representatives from the U.S. and Canada, and the oil industry significantly delayed and stalled the development of the FQD and so the Commission went back to the drawing board.

Last week, the latest implementing measures were finally made public.  Unfortunately, there was no longer language requiring suppliers to differentiate among crude oil feedstocks like lower carbon conventional oil or higher carbon tar sands.  In place of this tracking method, the new measures instead put forth a single default carbon intensity value for fossil fuels that captures the carbon intensity of the EU fossil fuel mix as it was in 2010.  Though the use of this default value does little to discourage the import of tar sands to the EU, the possibility of review of the value’s accuracy over time could push suppliers to avoid tar sands and other high carbon fuels (as their use would lead to a higher default value and require increased use of electricity or lower carbon renewables to meet the 6% emission reduction goal).

Despite this, the new FQD measures require major fuel suppliers to disclose the trade names and volumes of the crude oils they import.  This is still a good step and will provide a level of transparency to the public that does not currently exist in the EU.  In addition, because trade names are associated with crude oil types, the tracking of this information will allow for simpler updating of the EU fossil fuel mix’s carbon intensity in the future.

Looking ahead to 2020, these new measures represent a major first step in transitioning the transport sector of the EU and other regions to cleaner and more renewable fuels.  The threat of climate change, and the sheer scale of the domestic transport sector’s greenhouse gas emissions, will require the serious commitments of governments and policymakers to address these challenges head on.  The FQD’s adoption in 2009 signaled the EU’s willingness to lead on this issue.  While the final measures (which still need to be fully adopted by the European parliament) aren't as strong as they could have been, it remains a step forward on combatting climate change.