Power and pollution at heart of EU's Baltic project

BRUSSELS (Reuters) - The European Commission has thrown its weight behind a Swedish push to clear the Baltic Sea of pollutants, to encircle it with power cables, and to protect against the risk of oil tanker collisions.

The European Union Strategy for the Baltic Sea Region will be a priority for Sweden, which takes the helm of the EU's rotating presidency from July, and could pave the way for similar projects in the Danube region and Mediterranean.

Among the Baltic's many challenges are heavy pollution by fertilizers and human waste, its isolation from European energy supplies and the huge disparity between rich countries like Sweden and Denmark and neighbors to the east.

The chief focus of the strategy, launched by the European Commission on Wednesday, is weaning eastern Baltic nations off their heavy dependence on Russian gas, which will be exacerbated when Lithuania shuts down its aging Ignalina nuclear plant later this year.

One key project is the 350-kilometre long NordBalt power cable from Sweden to Lithuania, which could be completed by 2016.

Another cable, the 800 megawatt Estlink-2 cable, will be built between Finland and Estonia and could be brought online by 2013. Power grids will also be strengthened in Sweden, Lithuania and Latvia, EU diplomats said.

All new power links would be backed by a common Baltic energy trading market to be set up by 2013 that would probably be guided by the existing rules of the Scandinavian Nord Pool market.

"It marks a new way of working together in the Union," said European commissioner for regional policy Danuta Hubner. "It does not imply new laws or institutions, but is rather based of the will of governments and citizens."

NORD STREAM

Many of the 80 projects in the strategy will be covered by around 50 billion euros ($70.6 billion) of existing EU funding for the region between 2007 and 2013, such as a 4 billion euro plan agreed in March to bolster the EU's energy connections.

At the heart of the Baltic's environmental problems are its stagnant waters, often uninhabitable for fish due to the rampant growth of algae, nourished on detergents, poorly treated sewage and fertilizer run-off from farms.

Sweden estimated the benefits from tackling nutrient pollution such as phosphates and nitrates could reach 2 billion euros a year due to improved fishing and tourism.

But the strategy will not take on the planned Nord Stream pipeline to carry Russian gas to Germany along the Baltic seabed, a project that is opposed by many in Poland and Lithuania.

Earlier suggestions of melding all national coastguard agencies into one overarching Baltic Sea Coast Guard have been dropped, a Commission source said.

Instead, the national agencies will aim for tighter coordination to deal with the risk of collisions between the many oil tankers steaming through and the dozens of fast ferries.

(Reporting by Pete Harrison)