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EU challenges world

While the deal laid down Europe-wide goals for cutting carbon dioxide (CO2) emissions and developing renewable sources, separate national targets will have to be set with the consent of member states, presaging years of wrangling between Brussels and governments.

Merkel scored a diplomatic victory by securing agreement to set a legally binding target for renewable fuels such as solar, wind and hydro-electric power -- the most contentious issue.

Leaders accepted the target of 20 percent of renewable sources in EU energy consumption by 2020 in return for flexibility on each country's contribution to the common goal.

"GROUNDBREAKING"

These are a set of groundbreaking, bold, ambitious targets for the European Union," British Prime Minister Tony Blair said.

"They require an immense amount of work for Europe to secure this but ... it gives Europe a very clear leadership position on this crucial issue facing the world," he told reporters.

By pledging to respect national energy mixes and potentials, the summit statement satisfied countries reliant on nuclear energy, such as France, or coal, such as Poland, and small countries with few energy resources, such as Cyprus and Malta.

The leaders committed themselves to a target of reducing EU greenhouse gas emissions by 20 percent by 2020 and offered to go to 30 percent if major nations such as the United States, Russia, China and India follow suit.
The statement also set a 10 percent target for biofuels in transport by 2020 to be implemented in a cost-efficient way.

But they did not endorse the executive European Commission's proposal to force big utility groups to sell or spin off their generation businesses and distribution grids in a process known as "ownership unbundling".

Instead they agreed on the need for "effective separation of supply and production activities from network operations" but made no reference to breaking up energy giants such as Germany's E.ON and RWE and Gaz de France and EDF.

Renewables now account for less than 7 percent of the EU energy mix and the bloc is falling short of its existing targets both for renewable energy and cutting carbon dioxide emissions.

French President Jacques Chirac insisted at his last formal EU summit that the bloc recognize that nuclear power, which provides 70 percent of France's electricity, must also play a role in Europe's drive to cut greenhouse gas emissions.

But several EU states are fundamentally opposed to atomic power or, like Germany, in the process of phasing it out.

Poland won a commitment to "a spirit of solidarity amongst member states" -- code for western Europe helping former Soviet bloc states if Russia cuts off energy supplies.

Several other new ex-communist member states in central Europe were among the most reluctant to accept the renewables target, fearing huge costs from the green energy revolution.

As chair of the Group of Eight industrialized powers, Merkel wants the EU to set the environmental agenda. The summit outcome will form the basis of the EU's position in international talks to replace the U.N. Kyoto Protocol, which expires in 2012.

Environmentalists, often critical of EU efforts, hailed the agreement as a breakthrough.

(Additional reporting by Marcin Grajewski, Jan Strupczewski, Darren Ennis)

Release link: http://today.reuters.com/news/articlenews.aspx?type=scienceNews&storyID=2007-03-09T154906Z_01_L04365785_RTRUKOC_0_US-ENERGY-EU.xml&pageNumber=2&imageid=&cap=&sz=13&WTModLoc=NewsArt-C1-ArticlePage2