EU leaders seek climate deal, but divided over costs

BRUSSELS (Reuters) - European leaders aim to agree a new decade of energy policy to cut climate-warming gas emissions to 2030 at an EU summit on Thursday, but sharp differences over sharing the cost mean a deal will be difficult.

The 28 member states want to set the pace for a global pact to be hammered out in Paris next year with industrial powers from Asia, North America and the rest of the world.

That pact would aim to improve on two decades of stuttering cooperation and rein in emissions of carbon dioxide blamed for a disruptive rise in temperatures.

There is broad acceptance for an overall EU goal of cutting carbon emissions from homes, power plants, cars, planes, farms and other sources by 40 percent in 2030 compared to the global benchmark year of 1990.

Conflict between Ukraine and Russia, the EU's biggest energy supplier, has also focused the EU on reducing its reliance on imported fossil fuels by increasing use of renewable energy and using domestic sources more wisely.

Arguments about helping poorer eastern states or preferring nuclear over wind or solar power may drag the negotiations through the night into Friday, diplomats said, although they still predicted a deal could be achieved.

"I am hopeful that we will be able to reach this final deal tonight. It is a crucial deal for many reasons -- for the global climate, for the health of European citizens, for the leading role the EU plays internationally in climate talks," European Council President Herman Van Rompuy said.

EU policymakers have sought to strike a delicate balance between big business, which claims more ambitious targets will drive away industry, and green campaigners who say the outline goals are not ambitious enough and nip Europe's burgeoning renewable technologies in the bud.

Companies such as ArcelorMittal, the world's biggest steelmaker, for instance has warned the EU plans would make European steelmaking uncompetitive.

Countering that argument, firms including Spain's Acciona, Coca-Cola Enterprises and Unilever, issued a joint statement this week calling for an ambitious set of 2030 goals, which they say are needed to encourage EU investment.

PROGRESS SO FAR

The plan is to build on an existing set of green policy goals to 2020, which have greatly increased the amount of renewable energy such as the sun and wind used across the European Union and cut overall energy use through measures such as better building insulation and more fuel-efficient vehicles.

At present, EU carbon emissions are nearly 20 percent below 1990 -- helped by the collapse of polluting industries in its eastern member states after the fall of communism 25 years ago.

After six years of economic crisis, many states say their national budgets will struggle to cover the cost of more ambitious targets. And leaders fret about the reaction of voters to a range of related effects, from a loss of jobs in industry to new EU regulations limiting the power of domestic appliances.

Coal-dependent Poland, whose new Prime Minister Ewa Kopacz is attending her first EU summit, fears the political fall-out from policy that could shut mines a year before an election.

Britain's David Cameron, pushing for minimal restrictions on how to meet the target, wants to keep open nuclear options and fears red tape will fuel Eurosceptic demands to quit the EU.

Portugal and Spain, keen to export energy, are pressing hard for stricter targets that would push France to accept more power connections being built to link Iberia across the Pyrenees.

TARGETS

The European Commission, the EU executive, has laid out three 2030 targets: as well as cutting emissions by 40 percent from 1990, they propose green fuel should provide at least 27 percent of energy and improving energy efficiency by 30 percent.

Any deal agreed this week will commit governments in principle for years to come, but detailed legislation will only be worked out later and could take account of how far other global powers follow suit.

Other issues on the leaders' agenda on Thursday and Friday include how to help African countries fight Ebola and agreeing to appoint a coordinator for EU efforts against the disease.

The EU will also press Russia to do more to do more to defuse the conflict in Ukraine as the Kiev government holds a general election this weekend.

The bloc is unlikely to make changes to trade sanctions against Moscow but could discuss Kiev's request for new loans as the EU tries to broker a deal to restore supplies of Russian gas to Ukraine before winter sets in.

On Friday, they are due to discuss the troubled economy and proposals from the new EU executive, the European Commission to be headed by Jean-Claude Juncker, to promote investments to stimulate growth and jobs. Members of the euro zone are also due to discuss specific issues facing the common currency area.

But officials expect little in the way of decisions on economic issues, with tension between Germany and France over spending and austerity to be handled in the weeks to come.

(Additional reporting by Julia Fioretti; Editing by Alastair Macdonald, Tom Heneghan and David Evans)

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