GREENHOUSE GASES: EU LEADERS have signalled that they will offer concessions to heavy industry and states from central and eastern Europe to help clinch a deal on the EU's climate change package. But they also agreed to stick to a December deadline to finalise the package, despite growing opposition prompted by a worsening economic climate.
"I put all the weight of France on the scale. The climate change objective is of total importance," said French president Nicolas Sarkozy after a bruising discussion on the package with fellow European leaders at the European Council in Brussels yesterday.
The package sets ambitious targets for the EU to reduce CO2 emissions by 20 per cent by 2020, compared to 1990 levels. It includes targets to boost energy efficiency and the use of renewables by 20 per cent and would force heavy industries and electricity producers to purchase emissions allowances.
Talks are scheduled to conclude in December on how to implement the package, but several states from central and eastern Europe and Italy are raising serious objections. Italian prime minister Silvio Berlusconi and Polish prime minister Donald Tusk threatened to veto the talks over concerns the package could damage their economies. Warsaw is concerned it would force its coal-fired power stations to close and significantly increase the price of electricity, while Rome fears the relocation of heavy industry outside the EU through "carbon leakage".
"We don't think this is the moment to push forward on our own like Don Quixote," Mr Berlusconi said when asked why he wanted a delay in agreeing a deal.
Mr Sarkozy was later forced to alter the summit conclusions to reflect the concerns, promising to apply the package in a "rigorously cost-effective manner" and having regard to each "member states' specific situation". No firm details emerged about the concessions, but sources indicated more cash could be made available to central European states to help them cut CO2 emissions.
One proposal is that some of the money raised from the auctioning of "emission allowances" could be funnelled towards states in central and eastern Europe.
The package will also have serious implications for the Irish economy, which has been told to cut emissions by the maximum amount possible under a burden- sharing scheme of 20 per cent. The commission estimates this effort will cost the exchequer at least €1 billion to implement every year between 2013 and 2020.
Agriculture, transport and home heating account for a large proportion of Irish CO2 emissions and are sectors where it is extremely difficult to achieve cuts. Irish diplomats have lobbied unsuccessfully to shift some of the burden of making cuts in emissions from these sectors to industry, which is covered by the emissions trading sector.
EU states have objected to allowing the trading of emission allocations - permits that can be bought to enable states to pollute - between different sectors. But another idea supported by Ireland, which allows member states to trade these credits within each sector, has won support at EU level. This mechanism means countries such as Ireland, which cannot meet their own CO2 reduction targets, can buy the right to pollute from states that have surpassed their own national targets.
Taoiseach Brian Cowen said the Government was involved in discussions with the commission and the presidency on the detail of climate change plan. But he said climate change should be tackled on a pan-European basis.
Environmentalists criticised the summit and accused EU leaders of backtracking on the package, the outline of which was agreed last March.
"Mr Sarkozy and others are showing that they are unwilling to walk the walk when it comes to decisive action," said Greenpeace spokesman Mark Breddy.