BRUSSELS—European Union leaders pledged on Friday to agree laws within 12 months to implement their ambitious goals for combating climate change but promised to soften the blow for heavy industries.
A final statement at a two-day summit set a tight timetable for adopting mechanisms to curb greenhouse gas emissions and promote green energy sources but stressed they must be affordable at a time of economic downturn and market turmoil.
Concerns about slowing growth and financial instability prompted the 27 leaders to add the tell-tale phrase "so as to avoid excessive costs for member states" to the statement.
"We adopted the timeframe and the principles for the climate change and energy package," Slovenian Prime Minister Janez Jansa, whose country holds the EU presidency, told a news conference.
Failure to agree on the details by this time next year would weaken the bloc in United Nations talks on curbing emissions with other countries, including the United States, in Denmark in November 2009.
In a gesture to Germany, the European Commission pledged a binding commitment next year to make special allowance for energy-intensive industries if there is no global deal.
The 27 leaders pledged to enact laws by March 2009 to meet their goals of slashing greenhouse gas emissions by 20 percent by 2020 and increasing the share of wind, solar, hydro and wave power and biofuels in their energy mix by the same date.
They stressed the need to ensure that the high cost of carbon trading, the EU's central instrument in the fight against global warming, should not drive sectors like steel, cement, paper and aluminium out of Europe or out of business.
"We're not calling the reduction targets into question, but even if we have a common European goal, we can still discuss the way to achieve it, and what can be imposed on each industry," German Chancellor Angela Merkel told reporters.
Commission President Jose Manuel Barroso said the EU executive would make provisions for those industries in a reform of the Emissions Trading System, but details should be left until it was known whether there would be an international pact.
"The European Council recognises that in a global context of competitive markets, the risk of carbon leakage is a concern in certain sectors such as energy-intensive industries exposed to international competition that needs to be analysed and addressed urgently," the summit statement said.
Carbon leakage is a term used to describe firms relocating production outside the EU or being forced out of the market by competitors in countries that have less strict environmental controls, undermining the EU climate efforts. French President Nicolas Sarkozy said he was hopeful of reaching a package deal on climate change under France's presidency of the EU in the second half of this year.
But several leaders said a deal would be difficult because of conflicting national priorities.
Britain, Sweden and the Netherlands opposed Merkel's demand that the EU agree in 2009 on special conditions for big energy users, saying it would weaken the EU's hand in the U.N. talks.
France has argued in favour of a "carbon tax" that would impose duties on goods from countries that do not sign up to a global emissions deal but Paris has been quiet on the idea recently after critics said it could break world trade rules.
Leaders also approved a watered-down Franco-German plan for a Union for the Mediterranean to boost ties with the EU's southern neighbours after months of bitter wrangling.
Highlighting threats to European economic growth, the euro hit another record high above $1.56 on Thursday and oil prices hovered near a peak of $110 a barrel.
Aside from cutting emissions by at least one-fifth by 2020 from 1990 levels, EU states have agreed to use 20 percent of renewable energy sources in power production and 10 percent of biofuels from crops in transport by the same date.
Slovenia's Jansa acknowledged growing debate among scientists and economists about the desirability of the biofuels target, saying: "We're not excluding the possibility that we'll have to amend or revise our goals."