Fresh doubts raised over December EU climate deal

EU countries may agree before the end of the year on the basic principles and structure of an agreement on the European Commission's energy and climate package, but it is unlikely that a deal will be finalised, an ambassador of one of the bloc's 27 member states told EurActiv. 

Efforts to forge an agreement on the package have run into opposition from a group of 'new' member states, led by Poland, who say the plans could wreck their industries and lead to massive job losses, particularly in the context of economic recession. 

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Many countries from the former Soviet bloc claim they are being punished rather than rewarded for emitting less CO2 during the transition from Communism in the 1990s than more developed EU member states during the same period. At issue is a proposal by the Commission to base emissions reductions calculations for 2020 on the base year of 2005 rather than 1990. Brussels says this is necessary, since 2005 is the first year for which reliable data is available.

"I can't see how a deal will be possible," said an official in the Council's general secretariat, pointing to the large volume and complexity of the package and to widely diverging views between member states about how the 'effort' of reducing CO2 emissions should be shared. 

Discussions will come to a head at the much-anticipated 11-12 December EU summit in Brussels. Some are placing their hopes on the energetic leadership of French President Nicolas Sarkozy, who has repeatedly confirmed his intention to clinch a deal before Paris relinquishes its EU presidency to the Czech Republic in January 2009. "We shouldn't forget that Sarkozy is president," one eastern European diplomat told EurActiv. "There is a pretty good chance" a deal will be reached, the diplomat added. 

But it is unclear at what cost such a deal would come. Paris has floated a compromise plan that would allow Poland and other new member states to grant millions of free emissions allowances to their coal-dependent power sectors under the EU Emissions Trading Scheme (EU ETS), the Financial Times reported.

If approved, such a move would represent a significant departure from the Commission's original EU ETS proposal, which calls for full auctioning for the power sector as of 2013. A massive 'break' in emissions reductions obligations for the power sector would also have a significant impact on ongoing international climate negotiations, with a major UN climate change summit in Poznan, Poland scheduled to wrap up on 12 December, the same day as the EU summit.

Meanwhile, Parliament's role in the discussions is also crucial. MEPs are scheduled to vote in plenary on the package on 3-4 December, a move that would signal the start of a second reading and rule of the possibility of a first-reading deal being reached on the basis of ongoing 'trilogue' discussions between the Council, Parliament and the Commission. 

It is unclear if the Parliament will actually vote before the December European Council, however. The move to schedule an early plenary is widely perceived as part of a political strategy designed to pressure member states to honour the Parliament's line in the discussions. 

Nonetheless, supporters of the climate package are nervous that failure to reach a deal before the end of 2008 could put the EU in a tight spot, since the negotiating process will grind to a halt in March 2009 when the legislature of the current Parliament ends.