Rocky path ahead for EU green legislation

Speaking before an EU ministerial meeting in Luxembourg, Ms Prestigiacomo suggested to introduce "a review clause," allowing the union to revisit its green commitments once real costs are fully assessed in 2009.

Earlier, an another member of the Italian government - innovation minister Renato Brunetta - described the EU's green vision as an "act of madness."

The 27-nation EU pledged last year to cut greenhouse gas emissions by 20 percent compared to 2005 levels by the end of next decade. Italy claims the commitment would cost its economy some €25 billion per year - twice as much compared to the commission estimates.

But the French EU presidency tried to put a positive spin on the ministerial session, saying all member states have shown "very strong willingness" to step up efforts aimed at wrapping up wrangling over the draft package of green legislation in early December.

"The EU must preserve its leadership. There is no point in going to Poznan if Europe does not exploit its capacity to progress," French environment minister Jean-Louis Borloo said, referring to the UN climate change conference to be held in Polish city of Poznan on 1-12 December.

EU environment commissioner Stavros Dimas reiterated Mr Borloo's message and added that efforts to fight climate change were "in absolute comformity with what we should do to tackle economic and financial crisis." He cited new jobs in the renewable energy sector and lower dependency on imported oil as practical benefits.

"The package [of green legislation] is equitable, balanced and fair," Mr Dimas insisted, although admitting "concerns" on the side of EU governments remain.

How to divide CO2 emission targets

The major sticking point centres around a plan to reform the existing emission trading scheme (ETS), dealing with the distribution of carbon dioxide emission targets among EU states and industry.

Some countries - including Italy and highly coal-reliant Poland - would like to see the power sector buying the right to emit carbon dioxide by auction only from 2020, instead of from 2013 as envisaged by the commission.

In addition, they insist on establishing a mechanism that would keep European industry on an equal footing vis-a-vis its non-EU competitors.

Both concerns seem to have won some understanding from EU French presidency and the commission, now willing to discuss possible derogations. Any exceptions to the rule should be "limited in time and scope," commissioner Dimas underlined, however.

The EU's executive body should also table "qualitative and quantitative criteria" allowing to identify sectors that are exposed to international competition and would suffer most by mandatory CO2 cuts in the absence of a broad international agreement on the issue.

Such industry should consequently gain free CO2 permits instead of buying them by auction, Italy suggests.

But three leading environmental NGOs - Greenpeace, Friends of the Earth Europe and World Wildlife Fund - strongly criticised the course of the ministerial debate, describing it as "poor."

"It gave more room to the opportunistic demands of the Polish and Italian governments, who want to give old fashioned, inefficient and wasteful industries a free ride at the expense of innovation and job creation," their joint statement says.