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* Denmark says green growth the only way forward
* Commission estimates show current text greatly diluted
* Ministers agree on green vision, haggle over firm goals
By Barbara Lewis
HORSENS, Denmark, April 18 (Reuters) - EU ministers must not throw away the chance to create thousands of jobs and spur the economy, the EU's climate chief said on Wednesday, ahead of talks in Denmark to tackle deadlock on a planned energy saving law.
The Danish European Union presidency has said the Energy Efficiency Directive is a priority for its six months at the head of EU debate, which ends in June.
But it has also said it is a huge challenge, as member states and some from big business niggle over the upfront cost of measures, such as better insulation.
Ahead of informal energy talks on Thursday in Horsens, Denmark, Climate Commissioner Connie Hedegaard said ministers bore a responsibility not to waste the chance to drive growth and jobs - for instance in building renovation.
The planned law would also cut domestic utility bills and curb national imports of oil and gas.
"If Europe does not step up its green economy efforts, we risk losing an immense source of quality jobs. This is the very clear message from the European Commission today," she said in a Tweet.
"If we water down our efforts on energy efficiency, we water down the job potential as well."
A Commission analysis, seen by Reuters, found the draft law in its current state, following objections from member states, would deliver only 38 percent of the Commission's original proposal.
The Commission also has published figures showing the planned law could create around half a million jobs and 34 billion euros in gross domestic product in 2020.
As member states are divided, so is business. Members of the European Parliament have said they, along with other officials, have been lobbied by utilities, worried about the impact on their earnings and the cost of measures such as insulation.
Others in business support energy efficiency. Some of the most committed have formed the European Alliance to Save Energy, which brings together multinational companies including Siemens , Philips and Schneider Electric. It has written to all the EU's energy ministers.
The letter seen by Reuters, said the law "not as a burden", but "an opportunity to help the EU to reach its energy savings and climate targets, drive growth and create jobs".
"The adoption of a framework of long-term and clear measures will send a credible and strong signal to the business community and Europe's partners that the European Union remains committed to develop an internal market for low carbon technologies and systems," it said.
Energy savings is the only one of three EU 2020 environmental targets the EU is officially not expected to meet.
The current rate of progress would cut energy use, compared with projected levels, by around 10 percent - half the EU's goal of 20 percent by 2020.
The aim of the energy savings law is to close the gap, but objections from member states have, for instance, led to a cut in the number of public buildings that would need to be renovated and made savings calculations less rigorous.
Climate Action Network Europe, which brings together non-governmental organisations, sent a note to the ministers.
"Whittling away every article of the directive will help no-one except the fossil fuel exporters that benefit from Europe's energy wastefulness," it said.
Thursday's talks will be informal, so there will be no formal decision.
Wednesday's environment talks, also informal, were less problematic. Officials said they achieved virtual consensus on the need for a Seventh Environmental Action plan to follow the sixth, which runs out this year.
The next plan would be designed to give a broad framework for sustainable law-making, including on issues such as water, waste management and biodiversity.
"There was a huge measure of agreement that in spite of our economic crisis, the green economy is not just one way forward, it is the only way forward," Danish Environment Minister Ida Auken told reporters.
Editing by William Hardy