Environmental groups are concerned the Canadian government may have persuaded the European Union to backtrack on a proposed fuel policy that would have targeted Alberta's oilsands.

"Canada seems to have been lobbying hard and they may have succeeded," said Susan Casey-Lefkowitz of the Natural Resources Defense Council in Washington, D.C.

She was referring to talks taking place within the 27-nation EU trading bloc with respect to fuel standards. The EU is trying to reduce greenhouse gas emissions by encouraging the use of low-carbon fuels.

Last fall, the EU released draft guidelines that distinguished between the carbon footprint of fuels derived from the oilsands and those that come from conventional crude. That distinction would have allowed regulators to penalize users of oilsands-derived fuel or reward those who didn't.

The distinction has been erased in the most recent draft of regulations. According to an EU discussion paper obtained by The Canadian Press, only one figure for greenhouse gas emissions will be used for oil no matter what its source.

"One default value per fuel or energy and feedstock type," says the document, which was sent to the EU's member states for consideration.

"Values for the extraction portion of the life cycle were adjusted to be more consistent with values calculated in other regions of the world."

The shift comes after heavy lobbying from the federal government. Letters from Canadian diplomats have been obtained by various environmental groups and released to reporters.

"Mainstream crude oil sources, from light to heavy, including oilsands crude, all have similar life cycle (greenhouse gas) intensity," says a letter from a Natural Resources Canada official to the head of the EU's environment unit.

The letter says once it is used in a vehicle, fuel from oilsands emits only 5 to 15 per cent more carbon dioxide than conventional crudes.

"Given the small difference in life-cycle emissions among different crude oil pathways ... it is recommended default carbon intensities be assigned independent of their sources of pathways. This would prevent any unjustified discrimination (against) oilsands crude."

Ross Hornby, Canada's ambassador to the EU, argued in a letter to the group's director-general of environment that distinguishing oilsands fuel from other fuels would be difficult and expensive.

"Such a system would be extremely difficult to implement and monitor and would in itself create barriers to trade, particularly in light of the integrated nature of the North American oil industry," he wrote.

Environmentalists argue that oilsands crude releases about three times as much carbon dioxide as conventional crude when the difference between extracting and refining the two fuels is measured.

Between 75 and 80 per cent of the carbon in any barrel of oil is released when it is used.

Groups such as the Sierra Club promise to fight the draft guidelines and get the distinction for oilsands crude reinstated.

"The powerful oil lobby has the Canadian government doing its dirty work again," said Sierra Club head John Bennett. "It is bad enough that our government has absolutely no policies on climate change or to curb pollution, now they are interfering in foreign governments' environmental policies."

A letter, signed by 12 environmental groups, has been sent to the EU asking for the oilsands distinction to be restored.