BRUSSELS (Reuters) - European leaders will seek to ease the shock for heavy polluters when they meet later on Thursday to agree measures to tackle climate change, a draft document showed. The European Union hopes to agree ways of cutting carbon dioxide, the main greenhouse gas, to 20 percent below 1990 levels by 2020, as it heeds warnings of stormier weather, droughts, famines and rising sea levels.
BRUSSELS (Reuters) - European leaders will seek to ease the shock for heavy polluters when they meet later on Thursday to agree measures to tackle climate change, a draft document showed.
The European Union hopes to agree ways of cutting carbon dioxide, the main greenhouse gas, to 20 percent below 1990 levels by 2020, as it heeds warnings of stormier weather, droughts, famines and rising sea levels.
Having already struck deals in recent weeks to promote green energy and cut emissions from cars, the focus has switched to the most contentious issues -- power generators, heavy industry and manufacturing.
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Germany appeared to have secured an early win in the shape of measures to protect the steel, cement, chemicals, paper and other industries from the added cost of buying permits to emit CO2 from the EU's flagship emissions trading scheme (ETS).
"This covers about 90 percent of industry, and I don't see any reason why Germany would not accept this proposal," German conservative lawmaker Peter Liese told Reuters. "I see it as a victory."
With Germany and other manufacturing nations largely satisfied, negotiations will switch to bargaining with eastern European states over how much money they need to accept a proposal that will punish their power sectors.
Proposals to make power generators pay for permits to pollute from 2013 are aimed at making the dirtiest plants uneconomical, but that has caused alarm in Poland, which gets over 90 percent of its power from highly polluting coal.
SOLIDARITY
Poland's demand for coal plants to get 70 percent of their emissions permits free in 2013, paying for them fully by 2020, has been accepted in the draft seen by Reuters.
Other big coal users among the former communist countries could also be granted opt-outs for their power sectors, as could Malta, Cyprus and the Baltic states because they are not connected or poorly connected to the EU electricity grid.
On top of the opt-outs, the eastern European nations are also demanding an injection of cash to help them replace coal with green energy and nuclear.
A proposed 7.5 billion euro ($9.7 billion) "solidarity fund" taken from the ETS proceeds looks to have been weakened by the fact so many European sectors have been exempted from paying into the scheme.
That prepares the ground for a battle over how the "solidarity fund" should be topped up, with Britain putting up stiff resistance to any further handouts and Germany proposing the issue be dealt as part of EU budget negotiations.
"It's all at the expense of the western countries so it will be very difficult to negotiate an increase of even 1 percent," said a Bulgarian government official. "It would be a huge success to agree even on the smallest percentage."
A successful deal this week is seen as vital to catalyze global talks on cutting greenhouse gases from other big emitters such as Russia, China, India and the United States.
"If we fail to reach an agreement at this summit, it will be disastrous for climate negotiations next year," said Danish Prime Minister Anders Fogh Rasmussen.
(Additional reporting by Anna Mudeva, Ilona Wissenbach, Ingrid Melander and Marcin Grajewski)
