Carbon revenues can aid climate fight-Barroso

By Gerard Wynn

LONDON (Reuters) - The European Commission wants European Union states to spend on clean energy technologies a fifth of the billions of euros they raise from selling emissions permits to high-polluting industry, its chief said on Monday.

That could spell a cash cow for alternative energy companies as the Commission tries to sharpen its climate policies and catch up with U.S. investment in clean technologies, but any final decision would rest with individual EU member states.

Brussels will announce on Wednesday a raft of new climate change policies, to kick in from 2013, aiming to boost low carbon-emitting businesses while trying not to harm traditional high-polluting industries such as steel.

"We are planning, it's not yet adopted, that the revenues of the auctioning from member states will be invested 20 percent of this in climate change," said Commission President Jose Manuel Barroso in a speech at investment bank Lehman Brothers in London.

He said Europe was lagging in so-called venture capital funding for start-up renewable energy companies.

"I believe in that matter the Americans are doing better than we are," he said.

One of the biggest changes will be an overhaul of the EU's emissions trading scheme, to wipe out windfall profits that Europe's biggest polluters have earned by adding to power prices the cost of emissions permits they obtained for free.

Auctioning permits instead could raise up to 60 billion euros ($87 billion) a year for EU governments, Deutsche Bank estimates.