03/13/2013 05:38 EDT | Updated 05/13/2013 05:12 EDT

Harper To Sign Co-Operation Deal With France On Using Seaweed For Biofuel

OTTAWA - The Harper government will use a visit by the French prime minister to burnish its tarnished reputation in Europe on energy and the environment, The Canadian Press has learned.

France and Canada will sign a joint declaration Thursday on a research co-operation initiative that will focus on creating biofuels from seaweed.

The announcement, prior to a joint press conference with Prime Minister Stephen Harper and his visiting French counterpart, Jean-Marc Ayrault, builds on last year's breakthrough in biofuel technology when scientists found a way to use seaweed as an alternative fuel source.

That discovery helped alleviate the controversy around using corn to create ethanol, because critics questioned the use of food as an energy source.

The co-operation deal is also important for the Harper government because Alberta oilsands crude faces the prospect of being labelled as "dirty oil" by a European Union committee.

The EU's proposed new Fuel Quality Directive would assign greenhouse gas emission values to different sources of fuel, sparking Canadian concern that oilsands crude would be unfairly categorized.

Though separate from the ongoing and unresolved Canada-EU free trade negotiations, the issue has been a major irritant between Canada and a continent that views it as a laggard on the environment.

On Thursday morning, Harper and Ayrault will preside over the signing of an agreement between Canada's National Research Council and France's Commission on Atomic Energy and Alternative Energies on using seaweed as an alternative fuel source.

The memorandum will be an attempt to change the channel on the unfavourable narrative unfolding in Europe about Canada's environmental record and the level of greenhouse gases being produced in Alberta's oilsands.

The debate over the Fuel Quality Directive has forced Canada to lobby heavily in European capitals against being given an unfavourable designation.

Canada sells very little, if any, oil to Europe, but the industry fears a "dirty oil" label could set a dangerous precedent.

Such a designation could also have major implications for Canadian industry, which is expecting a U.S. decision on the Keystone XL pipeline that would link northern Alberta to Gulf Coast refineries.

If the directive is approved, it will go on to the full European parliament, where it will either be vetoed or passed into law.

A decision on the directive was expected sometime in early 2013, but has yet to occur.

During a speech at a dinner for Ayrault on Wednesday night, Harper noted that France has interests in Alberta's oil fields.

"Recent numbers put trade between Canada and France at close to $9 billion dollars annually," Harper said.

"French companies combined have more than $15 billion dollars invested in Canada including a significant presence in the Alberta oil sands."

At a breakfast meeting Thursday, Environment Minister Peter Kent and Natural Resources Minister Joe Oliver will meet with Delphine Batho, France's minister for the ecology and sustainable development, sources say.

Harper and Ayrault met privately on Wednesday ahead of Thursday's broader breakfast discussion involving their ministers.

Harper said the two would discuss the ongoing Canada-EU free trade negotiations "and some of the economic challenges we have" and "peace and security issues."

Ayrault heralded the completion of the Canada-EU trade talks.

He said in his dinner speech Wednesday night that the deal would be "an even foundation on which to open a new chapter in this transatlantic relationship that will benefit both our countries."

Earlier in the day, International Trade Minister Ed Fast said a small set of difficult issues stood between the conclusion of a comprehensive free trade deal, one that Canada hoped to seal by the end of last year.

"I'm confident that if both parties bring a high level of goodwill to the final stretch of negotiations that we'll be able to get it done," Fast said in an interview.

Harper also noted the deep, historic, cultural, linguistic links between France and Canada, and a "modern" relationship based on "shared economic needs" and "security preoccupations" and "shared values."

"France is one of our closest and most important relationships in the entire world," said Harper.

The two leaders will also preside over the signing of a second memorandum — a youth mobility agreement, normally low-level standard fare during a visit of a foreign leader to Ottawa.

But with growing numbers of French young people coming to Canada to seek opportunities because of the high cost of living in recession-ravaged Europe, the deal will aim to increase the number of Canadian young people seeking opportunities in France.

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