WARSAW AND BERLIN say a "special arrangement" is needed to shield Poland's coal-dependent economy from a new EU regime for reducing carbon dioxide emissions.
Polish prime minister Donald Tusk said after receiving German chancellor Angela Merkel in Warsaw yesterday that he was "optimistic" a deal could be found on carbon trading certificates ahead of talks in Brussels tomorrow and on Friday.
Until now, Polish officials were ready to derail an EU plan to charge power generators for emissions permits in the hope of reducing environmentally damaging carbon dioxide emissions.
Warsaw rejects the proposal as it stands, saying it does not take into account its 95 per cent dependence on domestically mined coal for energy.
Having to buy carbon permits on an open market in competition with deep-pocketed European rivals would drive up domestic electricity bills, Poland argues, hobbling its economy at a time of financial uncertainty.
"It isn't our aim to veto," said Mr Tusk. "We both know it won't be easy; every country has its own concerns. But today's meeting shows that Germany understands Poland's point of view." Warsaw has called for its power stations to be supplied with free certificates until 2019, to allow time for a transition to clean energy sources.
Dr Merkel said such a target was "conceivable" and, without mentioning further details, spoke of "cautious optimism" of a deal.
"The probability of a veto has lessened," she said, "with some good will and hard work".
Germany has its own interest in modifying EU climate change proposals to protect its own heavy industry. Indications this is now on the agenda have disappointed environmental campaigners who had praised Dr Merkel for prioritising environmental issues.
The German leader left no doubt this week that, with a general election looming next year, her concerns about the climate will have to take a back seat to the German labour market.
Writing in the Bild tabloid, she said she would not approve any EU climate rules "that endanger jobs or investments in Germany".
Asked yesterday in Warsaw about her climate credentials, she suggested there were many ways of arriving at the EU goal of 20 per cent renewable energy and a 20 per cent cut in CO2 emissions by 2020 relative to 1990 levels.
The perceived shift in tone was attacked yesterday by Germany's Green Party, mooted as an outside chance coalition partner after next year's election. A spokeswoman said Dr Merkel had "abdicated her position as climate chancellor".