EU lawmakers urge caution on bloc's carbon curbs

A man walks past the Ratcliffe-on-Soar power station in central England, central England, October 30, 2006.

BRUSSELS (Reuters) - The European Union's response to global warming could be watered down to cut the impact on heavy industry and ensure the bloc takes a cautious approach to tougher goals, a document seen by Reuters shows.

The moves aimed at protecting EU industry from overseas competitors have alarmed environmentalists, who accuse lawmakers of already weakening curbs on emissions from cars and aviation.

As part of its drive to lead the world in fighting climate change, the 27-country EU has committed to cutting carbon dioxide emissions by one fifth by 2020, compared to 1990 levels.

It is also considering increasing the cut to 30 percent if big countries such as China and the United States commit to their own reductions in ongoing global climate treaty talks.

But members of the European Parliament's influential industry committee are mulling an amendment that would demand a full impact assessment before cutting beyond 20 percent.

"I think we should bring the latest science into any decision," Swedish liberal MEP Lena Ek, who drafted the "compromise amendments", told Reuters on Thursday.

Any move to alter the 20 percent cuts would also be subjected to full legislative scrutiny by the EU's member states and EU lawmakers before becoming law.

"This could potentially fatally undermine an automatic move to a 30 percent cut in emissions, as the EU would have to go through the whole co-decision procedure," WWF campaigner Kirsty Clough said on Thursday.

But Ek said any impact assessment might equally allow the EU to increase its ambition for carbon dioxide (CO2) curbs.

The committee will vote on the proposed amendments in two weeks, with a full parliament vote later in the year.

PLAN B

Industry committee members returning to work this week are also considering amendments to alter the EU's flagship Emission Trading Scheme (ETS) so it has less impact on energy-intensive industries such as steel.

"We have to be stricter about preparing a Plan B -- for the chance that there will be no international agreement," said Ek.

Under present proposals, from 2013 the scheme will force power generators to buy permits for all their emissions of CO2, the main greenhouse gas blamed for global warming.

The European Commission is considering whether to allow steel and other energy-intensive industries to continue to get free permits, to safeguard their global competitiveness.

EU steelmakers say the Commission's current plans could cost the sector more than 50 billion euros ($78 billion) between 2013 and 2020 and put thousands of jobs at risk.

The steel industry is particularly worried changes would require steelmakers to buy CO2 emissions permits for electricity that it produces by recycling waste gas from blast furnaces. The industry committee would exempt such electricity.

Ek said new incentives were needed to prevent industry wasting such resources, as well as to promote combined heat and power schemes and district heating.

"It's a disgrace to see the flaring of waste gases as you drive through Europe, especially with the high energy costs of today," she said.

The new amendments also suggest issuing extra permits to energy-intensive industries to compensate them for higher power prices as a result of the carbon trading scheme.

"However ambitious we are with climate legislation, we can't make European companies uncompetitive in the global market, particularly high energy users, and that's what the Industry Committee will be looking at," said Welsh socialist MEP Eluned Morgan.

But WWF's Clough warned such moves cut incentives for energy-intensive industries to reduce power consumption.

(Editing by Gerard Wynn)