Chancellor Angela Merkel rejected industry criticism of her plans to cut Germany's greenhouse gas emissions by a third by 2020 and dashed its hopes of a deal to prolong the use of nuclear power. Merkel called the battle against climate change the "greatest challenge of the 21st century" at a news conference on Tuesday after a third meeting in the chancellery with political and industry leaders to discuss energy policy. "We all know what the costs of doing nothing would be," Merkel said, when asked about industry criticism that her grand coalition government had set overly ambitious goals on climate protection and was risking jobs.

"We're on the right track," she said. Top utility E.ON said in a statement the meeting had not fulfilled its hopes for a long-term energy plan, but it would nevertheless stick to a large 60 billion euros (US$81.61 billion) spending plan over the next three years. RWE's chief executive Harry Roels said consumers should be told that the ambitious climate targets could only be met if power prices went up in the medium to long term. The BDI industry association said many of the measures were sensible but that Merkel lacked the political power to "modernise the nuclear agreement and adjust it to reality."

Environmental groups and the BEE renewable energy association praised Merkel for not caving in to industry criticism. Merkel made the environment a centrepiece of Germany's six-month EU presidency and led an effort for the bloc to agree to cut carbon dioxide emissions by up to 30 percent by 2020.

NO MAJOR AGREEMENT

The Tuesday meeting with industry leaders, who were hoping to reopen a discussion about plans to phase out nuclear power in Germany by the early 2020s, produced no major agreement. The discussions will form the basis for a national energy plan in the autumn, which utilities fear will be unrealistic. They say they need to operate nuclear power stations for longer to win time to meet the environmental goals.

But Merkel, bound to a seven-year-old deal to phase out nuclear energy by the 2020s, would face a crisis with her anti-nuclear Social Democrat coalition partners if she agreed to a revision of that plan now. "The government made it clear to industry that there will be no changes to the coalition agreement (on phasing out nuclear power)," she said. The 17 nuclear plants produce a quarter of Germany's power.

Merkel said the government wants to fill the gap caused by the phase out and cut emissions of greenhouse gas carbon dioxide by increasing energy efficiency by three percent per year -- which industry calls unrealistic. "There are doubts that this goal is too high," she conceded. Merkel said the target would be checked and reviewed every year from 2010. BDI president Juergen Thumann said that, globally speaking, the target represented a record benchmark and was too risky. "It's like driving around in a car without a safety belt on -- you're hoping nothing will happen," Thumann said. Germany also aims to increase the share of renewable power to nearly 30 percent from 12 percent now.

(By Erik Kirschbaum and Vera Eckert, Planet Ark, 04/07/2007)