BERLIN - Germany can meet its target of reducing carbon dioxide emissions by 36 percent by 2020 only if it keeps nuclear power plants, which are being phased out, German industry group BDI said on Tuesday.

In a study co-authored by consulting firm McKinsey, the BDI found emissions could not be cut by more than 31 percent by 2020, compared with 1990 levels, without retaining atomic power or harming Germany's economy. Even achieving the 31 percent reduction would need further investment in technology and would raise the cost of cutting carbon dioxide (CO2) emissions up to 175 euros ($246) per CO2 tonne saved, up from the current 20 euros, the BDI said.

The German government in August agreed to a plan to help reduce the country's emissions of greenhouse gas CO2 by 36 percent by 2020 compared with 1990 levels.

Conservative Chancellor Angela Merkel is bound by her coalition agreement with the Social Democrats to phase out nuclear power by the early 2020s and risks a serious crisis with her coalition partners if she reneges on it.

Opposition to nuclear energy remains high in Germany, though it is experiencing a revival in other European countries. The BDI's study, which examined Europe's biggest economy to see how to cut carbon emissions without sacrificing living standards or economic growth, comes a week after the EU outlined plans to get tough with external energy suppliers like Russia.

The European Commission wants to open up its own gas and power markets to more competition and set stricter terms for foreign ownership of EU assets. Germany and France oppose the new EU plans.

(Reuters, 25/09/2007)