The EU's proposed new Fuel Quality Directive, which aims to curb emissions from transport fuels by 10 per cent, classifies oilsands crude as dirtier than conventional oil.
Canada has complained about the separate category for oilsands crude and has even threatened to take the matter up with the world's top trading body, the World Trade Organization.
If the directive is approved, it will go on to the full European parliament where it will either be vetoed or passed into law. If the document fails to get majority approval, it will be sent to the environment ministers of member states for further study.
The document assigns greenhouse gas emission values to different sources of fuel; Canada's key concern is that oilsands crude is placed in a separate category, with a value that's 23 per cent higher than conventional oil.
David Plunkett, Canada's ambassador to the EU, has written to the EU commissioner for climate action criticizing the directive, saying Canada will not accept oilsands crude being "singled out."
Plunkett has also pledged that Canada will explore "every avenue" to defend its interests.
The vote on the directive comes just days after an analysis by a Canadian scientist found emissions from Alberta's oilsands are unlikely to make a big difference to global warming and that the real threat to the planet comes from burning coal.
In a commentary published in the journal Nature, University of Victoria climate modeller Andrew Weaver, along with his colleague Neil Swart, found that if all the hydrocarbons in the oilsands were mined and consumed, the carbon dioxide released would raise global temperatures by about 0.36 degrees C — or half the total amount of warming over the last century.
When only commercially viable oilsands deposits are considered, the temperature increase is only 0.03 degrees C.
Burning all the world's coal deposits, the paper concluded, would create a 15-degree increase in temperature.
Governments around the world have agreed to try to keep warming to two degrees.
Weaver's analysis only accounts, however, for emissions from burning the fuel. It doesn't count greenhouse gases released by producing the resource.
The EU directive takes into account the emissions that occur in the production of different fuel resources. Conventional oil is currently assigned the lowest emission value, followed by gas-to-liquid fuel and then natural bitumen, which can come from oilsands. Coal-to-liquid fuel has the highest emissions value in the directive.
Canada currently sells very little, if any, oil to Europe, but those in the industry fear a "dirty oil" label there could set a dangerous precedent.
Having Europe classify oilsands crude as a separate item — "natural bitumen" — would also be another setback to the Canadian industry, already reeling from the U.S. decision to delay the Keystone XL pipeline linking northern Alberta to Gulf Coast refineries.
Despite Canada's displeasure with the EU directive, a spokesperson for Trade Minister Ed Fast has made it clear that Canada isn't pulling out of free trade talks with Europe.
Fast has made reaching a comprehensive deal this year with the world's largest market a top priority.