EU climate package under fire

Speculation is mounting that the European Union's wide-reaching climate change package could be watered down as the Council of member states meets this week to discuss the proposals.

According to a number of reports, the legislation is likely to be opposed by a number of member states with Poland, Greece, Hungary, Slovakia, Romania and Bulgaria set to argue against the entire package, while France, Germany, Austria, Italy and the UK are expected to attempt to water down certain proposals.

Leaked documents seen by The Guardian newspaper suggest that the EU council will propose that the EU's commitment to tighten its emission targets from a 20 per cent to a 30 per cent cut by 2020 in the event that other developed economies agree to similar cuts is effectively dropped.

The documents also reveal plans to extend the limit on the proportion of carbon credits from outside the EU member states will be able to buy to help meet the targets – a move opposed by green groups who claim it will allow EU governments to deliver smaller emission cuts at home.

The European Parliament's Environment Committee voted last week that member states should only be allowed to meet eight per cent of their emission reduction targets by funding low carbon projects in the developing world.

In contrast, several countries including the UK have been lobbying for permission to meet up to half of the target using carbon offset projects and are now poised to raise the issue of more relaxed import limits again this week.

Meanwhile, France, Germany and Austria are to call for greater protection for energy intensive industries such as steel, aluminium and chemicals through a greater allocation of free pollution permits through the European emissions trading scheme.

The European Parliament has been seeking the gradual phasing out of free permits through greater use of carbon credit auctions, but at a meeting of energy ministers in Luxembourg on Friday several countries voiced opposition to the proposals.

According to Reuters' reports, Austrian energy minister Martin Bartenstein said that the turmoil on the world's stock markets meant that heavy industry needed a more generous deal than that currently being proposed by the EU.

Similarly, German state secretary Peter Hintze said that if energy intensive industries see costs rise too much as a result of the changes they will simply leave the EU and continue to pollute at current levels in countries with more lax environmental legislation.

But Luxembourg lawmaker Claude Turmes told reporters that the EU should stick to its guns. "This is alarm level red," he said. "Lobbyists from every dirty industry are trying to profit from this crisis."

The UK's new energy and climate change minister Ed Miliband also argued that despite UK opposition to some of the proposals the bulk of the package should be retained.

"Now is not the time to row back on our ambitions in tackling climate change, " he said. "The current economic difficulties make these issues more important, not less. EU ministers have rightly signed up to achieve 20 per cent of energy coming from renewable energy sources by 2020 and it is important we show that we are committed to that target."

However, the proposals will face continued opposition from some business groups who argue that it will prove too costly and will damage competitiveness.

New research released today by UK think tank Open Europe, estimates the proposals will cost the EU a total of €73bn between now and 2020, arguing that it does not represent a cost effective means of curbing emissions.

The report claims that while independent studies have put the cost of cutting carbon emissions at around €40 per tonne the EU's proposals will cost between €80 and €105 per tonne, costing UK citizens an extra £150 per year.

It claims that by allowing governments to seek the cheapest means of curbing emissions, rather than mandating investment in expensive renewable energy, the cost of meeting emission reduction targets could be slashed.

"It is legitimate for the EU to set targets for absolute carbon emissions reductions, which should be our ultimate priority," said report author Hugo Robinson. "However, it is wrong for Brussels to micromanage national energy planning by setting binding targets for renewables and biofuels. This will artificially drive investment towards very high-cost methods of cutting carbon. "