EU Nations Threaten to Block Green Energy Rules

EU leaders face a long day on Thursday as they seek to agree on a new decade of climate and energy policy at a summit in Brussels, with nations from Poland to Portugal threatening to block a deal.

If the European Union can manage an accord, including a more ambitious greenhouse gas cut, it will be the first major economic bloc to set an emissions target for 2030 and would set the tone ahead of United Nations talks next year in Paris on a global pact to manage climate change.

Poland, whose economy depends on highly polluting coal, has always been at the forefront of objectors, but Portugal says it too would oppose the outline deal on the table so far. No one will rule out an all-night sitting into Friday morning.

An EU diplomat speaking on condition of anonymity said a preparatory meeting on Wednesday had been "a grand theatre that showed the huge differences between countries".

"Poland is not the main problem, or at least not the only problem, because several countries have declared that they would die for their position. What we have now ... shows it is high time to cool down and adopt a more conciliatory approach."

Portugal is among the nations to have pushed for ambitious climate goals but is also holding out for a firm commitment to encourage investment in new pipeline and grid infrastructure across EU borders.

"We will not support a deal that does not include a binding (infrastructure) target because we need to create a stable, predictable regulatory framework in order to attract private investment," Bruno Macaes, Portugal's secretary of state for Europe, told Reuters.

EU sources say Spain has a similar stance because, like Portugal, it has a surplus of energy that it cannot export to the rest of Europe because it cannot move it over the Pyrenees and then across France.

Beyond Poland, poorer east European states are also wary of committing to new cuts in carbon output without more compensation for efforts to modernise their economies. Since the collapse of their communist-era industries, they already emit much less pollution than in the global benchmark year of 1990.

"We're hearing that it's time to forget about the past," one east European diplomat said. "Come on, let's be fair. We won't accept any solution that ignores past performance."

Problems Can Be Overcome
EU officials predict that ultimately there will be a deal, but the finer details will be left for future debate, notably when legislation has to be drafted.

"There should not be problems that could not be overcome," European Climate Commissioner Connie Hedegaard told Reuters in an interview.

"It should be feasible to agree on a 40 percent domestic greenhouse gas target and a very strong signal on efficiency and renewables," she said.

The European Commission, the EU executive, has laid out three 2030 targets.

They are to cut greenhouse gas emissions by 40 percent versus 1990, increase green fuel to 27 percent of energy used and improve energy efficiency, through measures such as better insulation, to 30 percent compared with business as usual.

The draft policy would replace three 2020 goals, all of 20 percent.

The outgoing European commissioners, who step aside for a new team from the start of November, see a deal this week as part of their legacy achievement.

Once agreed, it will be up to the next Commission to formally propose legislation, which will still be subject to debate involving member states and the European Parliament.

The 2020 goals were agreed in outline in March 2007, finalised in December 2008 and formally published as EU law in April 2009.

Some business leaders and some member states - notably Britain - object to the idea of multiple targets and say the fragile EU economy would be best served by one binding emissions target plus a strengthened Emissions Trading System, the EU carbon market.

Others argue that only a set of binding targets will make any difference. They say firm renewable and efficiency goals are needed if Europe is to maintain its lead in green technology and curb its dependency on imported oil and gas, especially from Russia.

Companies including Spain's Acciona, Coca-Cola Enterprises and Unilever (UNLYF), issued a joint statement this week in support of cutting greenhouse gases by at least 40 percent, plus a 30 percent renewable target and an energy savings objective of at least 30 percent.

"We know that the economic cost of inaction is now greater than action," Paul Polman, CEO of Unilever, said.

"Without the right policy frameworks and political signals, even the most determined business action will not reach the scale we need to make a real difference."

Climate campaigners say the EU 2030 goals under discussion lack ambition. A group of non-governmental organisations including Greenpeace have called for targets of 55 percent for cutting emissions, 45 percent for renewable energy and 40 percent for energy efficiency.

(By Barbara Lewis; Additional reporting by Jan Strupczewski, Adrian Croft and Alastair Macdonald; Editing by William Hardy/Ruth Pitchford)