* Post-2020 debate still fluid, binding targets needed
* EU spent five years agreeing its 2020 goals
By Barbara Lewis
HORSENS, Denmark, April 20 A deal to deliver a 20 percent energy savings target could be possible in June following talks in Denmark, where no member state was "a blockade", Energy Commissioner Guenther Oettinger said on Friday.
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 run into a tide of objections from EU member states, anxious about the short-term costs of measures such as improved insulation and renovation of public buildings.
"I think realistically a solution is possible under the Danish presidency," Oettinger told a small group of reporters.
"The real message was that there was no blockade from anybody," he said referring to this week's talks in the Danish town of Horsens. "My hope is we can come to a solution in June in an ambitious manner that will realise this 20 percent target."
The Danish presidency also said arguments about the potential of the law to drive growth by creating jobs in housing renovation and in cutting dependency on foreign oil and gas were beginning to outweigh anxiety over initial costs.
"I feel this is the most constructive discussion we have ever had in the Council (of ministers) on this file," Danish Minister for Climate, Energy and Building Martin Lidegaard said.
"There is still a lot of work to be done, a lot of compromises to be achieved, and it will take flexibility from our side but also from the parliament's side and the Commission's side if we are actually to succeed in landing this directive."
Energy saving is the only one of three 2020 green targets the 27 member states are 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.
A Commission paper seen by Reuters drawn up before the talks in Horsens found that objections from member states had drastically undermined the ambition of the Commission's draft law and a still more ambitious text from the parliament.
ARGUING OVER PERCENTAGE POINTS
The result would have been that instead of arriving at the target of a 20 percent increase in energy savings by 2020, compared with projected levels, the EU would only improve to around 15 percent.
After this week's informal talks, the process of getting all the parties to agree on a final legal text continues next week after a very difficult round earlier this month.
Debate has been complicated by discussion on how to prop up the EU's Emissions Trading Scheme (ETS), which has collapsed to a series of record lows, meaning allowances are far too cheap to encourage low carbon investment.
Improved energy efficiency would mean reduced demand for carbon permits, potentially adding to a glut following economic slowdown.
On Thursday, Climate Commissioner Connie Hedegaard said the Commission would tackle the ETS issue separately by looking at reform of the timetable for auctioning the allowances big emitters need to offset their carbon, effectively tightening the market.
Oettinger agreed the Commission needed to draw up a proposal before the next phase of the carbon market.
"We have to have an instrument to be flexible enough day by day, year by year, to adapt to the economic situation. We need a decision before the end of the year before the next period starts in 2013," he said.
A stronger ETS would be only one part of establishing greater certainty for those investing in energy.
EU energy ministers on Friday also debated a future road map and policy goals for when the 2020 targets expire.
Oettinger said debate was still fluid, but there was a need for "some binding targets" and he reiterated a previous comment that a decision was needed before the current Commission's term of office ends in 2014.
If agreements were reached by 2014 that would leave more time for businesses to plan for the new regulations, he said, adding debate on the 2020 goals began in 2002 and took five years. (Additional reporting by John Acher; Editing by Helen Massy-Beresford)