The UK appears set to change its position and push the EU to allow the import of carbon-intensive oil from Tar Sands.
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The government's position was revealed in leaked documents obtained by Greenpeace and were passed to The Guardian before being made public on Energydesk.
Oil from tar sands requires far more energy to extract and is therefore typically far more carbon intensive then conventional crude oil.
It means more carbon dioxide is emitted for each gallon of petrol burned if the oil originall came from tar sands, undermining the benefits of improvements in vehicle efficiency.
The EU is in the process of negotiations intended to encourage the use of lower-carbon fuels in transport - which were initially intended to include proposals to limit or avoid the use of tar sands oil.
The move would be a blow to Canada which is also struggling to export the fuel to the US where President Obama has yet to decide on the Keystone XL pipeline.
But the leaked documents show the UK is lobbying against language which would class tar sands as more polluting than conventional crude or other fuels.
In the UK position document the UK government now says “it seems clear Options 0 and 2 seem to meet the policy aims of the directive”.
These were the only two options presented by the EU which did not include differentian between fuel types - and which would therefore not discribimate against higher carbon fuels such as tar sands.
The move is the strongest indication yet that the UK will go with the Canadian position to allow the unfettered import of tar-sand oil to the EU. By rejecting options which would differentiate between different sources of oil (the so-called feedstock for petrol) the UK position would also mean that wider targets to ensure clean fuel would - effectively - be impossible to meet.
The decision by Liberal Democrat minister Norman Baker will leave the party vulnerable to accusations of renaging on it's commitment to act to limit climate change.