EU's Dimas predicts EU climate deal this week

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By Gerard Wynn and Gabriela Baczynska

POZNAN, Poland (Reuters) - The European Union's Environment Commissioner, Stavros Dimas, was confident on Wednesday the bloc would resolve disputes and agree an EU climate package at a summit this week.

Danish Climate and Energy Minister Connie Hedegaard echoed Dimas' optimism on the summit's outcome but said tough negotiations were ahead.

The stumbling block was how many carbon emissions industry must pay for, and not an overall limit on greenhouse gases produced from burning fossil fuels like coal, Dimas stressed.

"We are going to have an agreement," the EU's environment chief told reporters on the sidelines of U.N.-led global climate talks in Poznan, western Poland.

"I can assure you that the reductions targets -- 20 percent by 2020 -- and the other targets that we have set in renewables will be intact," he added, referring to a goal to slash greenhouse gases by at least a fifth by 2020.

EU leaders meet in Brussels on Thursday and Friday to try to clinch a deal on the new climate goals, as Germany, Italy and new eastern member states seek concessions to protect their manufacturers and power plants.

"Of course there will be a lot of screaming and shouting but I guess and I hope definitely that we will get a result in the end," Denmark's Hedegaard said on Wednesday.

Poland and eight other new EU members say that forcing coal plants to pay for all carbon emissions will hurt their economies and people.

Under the original proposals all power plants would pay for every ton of carbon dioxide (CO2) emitted after 2012, under the bloc's emissions trading scheme (ETS).

GERMANY

Despite new concessions extending a period when their coal plants get free carbon permits, these countries have done no more than express positive expectations about the summit.

"The latest proposals, I think, are going in a very good direction. We'll see if they are sufficient," Poland's Environment Minister Maciej Nowicki told reporters in Poznan.

Italy and Germany are worried that their manufacturers may become less competitive internationally if they are forced to pay for their carbon emissions, and also want the guarantee of free permits.

Italy was ready to use its veto power against an EU deal if it deemed that its interests would be hurt "excessively," Prime Minister Silvio Berlusconi said on Wednesday.

Despite helping preside over the planned green rules last year, Angela Merkel is also now determined to preserve manufacturing jobs in the wake of the financial crisis and as German elections loom.

Environmental groups at the Poznan talks on Wednesday gave Berlin the daily 'Fossil of the day' award -- a statuette of a Jurassic Park dinosaur in the style of an Oscar.

"Germany, specifically Chancellor Merkel, takes the 'Fossil' tonight for catastrophic deterioration in its position on the EU climate and energy package," the green groups said.

Companies may have to pay for fewer emissions permits under the new concessions but that would still leave enough auction revenues for EU treasuries to fund the fight against climate change, said Dimas.

Such funding would be welcomed in the U.N. climate talks.

Representatives from some 190 countries are meeting in Poland to push talks aimed at clinching agreement on a new climate pact by the end of next year, to replace the Kyoto Protocol after 2012.

(Additional reporting by Anna Mudeva; editing by Jim Marshall)

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