Europe will seek to spearhead the fight against global warming this week when the European Commission proposes a bold unilateral cut in greenhouse gas emissions as well as liberalisation of energy markets. The executive Commission will propose on Wednesday that the European Union commit to unilateral cuts of carbon dioxide (CO2) emissions of 20 percent from 1990 levels by 2020, EU officials said on Monday.

The 27-nation bloc will also challenge industrial nations around the world to agree a collective cut of 30 percent by 2020 in the emissions blamed for climate change, said the official involved in drafting a landmark common energy policy. The Commission is set to recommend a break-up of some of Europe's energy giants but, given opposition from France and Germany, it will propose a less radical second option allowing power generators to continue to own distribution networks which other companies would eventually operate, the officials said.

Despite EU claims to leadership, several member states have failed so far to meet existing commitments under the UN Kyoto Protocol that limits emissions of so-called greenhouse gases. European Commission President Jose Manuel Barroso was set to press President George W. Bush, a major opponent of Kyoto, to do more on global warming at a White House meeting on Monday.

"The economic case for taking action to manage climate change is beyond dispute," Barroso said on Friday. "We ... have much to gain from teaming up, despite our differences."

More ambitious
The new EU goal would be more ambitious than the existing 8 percent target cut from 1990 levels in the 2008-2012 period adopted by the 15 members of the EU before its 2004 enlargement. Pledging to extend and deepen the cuts could boost the EU's fledgling emissions trading system, which allows major polluting industries to buy and sell emissions credits but has faltered because governments initially issued too many permits. Fewer permits would raise the price of emitting CO2, EU officials say.

European industry is worried competitors in the United States and elsewhere have an advantage because their governments have refused to sign binding commitments to reduce emissions. One thrust of the proposed Energy Policy for Europe is to reduce the proportion of electricity generated from gas, coal and nuclear power and increase the share of renewable energy. The Commission is also likely to propose a binding target of meeting 20 percent of EU energy needs from renewable sources by 2020, with no more than half from biofuels, officials said.

France fears such a target would pose big problems for its electricity sector, which is dominated by nuclear power. Senior EU officials held talks on Monday on the wide-ranging strategy with last-minute discussion centred on measures to expose Europe's biggest power companies to more competition. The Commission would state clearly its preference for the option of requiring power generating companies to sell their distribution assets, said sources familiar with the talks, adding some of the wording of the report still had to be agreed.

Paris and Berlin are opposed to the break-up of their energy giants and are also not keen on the second option of allowing utilities to retain ownership of their grids but making them give up responsibility for management. The report will be put to EU governments for approval. Political sources said Barroso, who would need the support of Paris and Berlin to win a second term as Commission chief, was unlikely to cross the Franco-German axis on this point. (Additional reporting by David Brunnstrom)
(Por David Lawsky and Ingrid Melander, Planet Ark, 09/01/2007)