EU post-Kyoto Plan in chaos as Italy joins Eastern Europe rebellion.

The European Union’s commitment to ambitious green targets became the latest victim of the global financial crisis yesterday when a growing number of EU countries rebelled, protesting that the plans were now too expensive. The timetable for binding European legislation by December was dropped as the EU watered down the CO2 emissions reduction and trading blueprint, that it had announced with a flourish only 18 months ago.

President Sarkozy of France, which holds the rotating EU presidency, led the way in appealing to all 27 countries to stick to their targets. But tempers flared at the quarterly European Council in Brussels, with Silvio Berlusconi, the Italian Prime Minister, clearly furious at the pressure being applied. During a stand-up row behind the scenes, he told Mr Sarkozy that the targets would crucify Italian industry.

“Our businesses are in absolutely no position at the moment to absorb the costs of the regulations that have been proposed,” Mr Berlusconi said later.

Donald Tusk, the Polish Prime Minister, said: “We don’t say to the French that they have to close down their nuclear power industry and build windmills, and nobody can tell us the equivalent.”

In an extraordinary break with EU protocol, both leaders said that they did not have to stick to the deal because neither had been in office when it was signed by their predecessors in March 2007. The eight countries have the voting power to form a blocking minority, should they choose to do so.

Mr Tusk said that Poland, along with Bulgaria, Hungary, Latvia, Lithuania, Romania and Slovakia, would resist any attempt to railroad the targets through. “We want to build an energy-climate package which poorer EU states can survive,” he said.

Mr Berlusconi directed his anger in particular at the Emissions Trading Scheme, which from 2013 will mean that all big EU industries have to buy permits to emit carbon dioxide in a bidding process. “It is ridiculous that we are selling the right to pollute,” the Italian Prime Minister said.

Under the original deal, EU countries would cut carbon dioxide emissions by 20 per cent from 1990 levels by 2020 – rising to 30 per cent if it encouraged global agreeement. Mr Sarkozy succeeded in preserving the overall goal but he faces an increasingly uphill task to hold various countries to their individual contributions.

The row erupted at the same time as Britain strengthened its policy. Giving his first speech to the Commons as Energy and Climate Change Secretary, Ed Miliband said that Britain would increase its target for reducing greenhouse gas emissions by 2050 from 60 per cent to 80 per cent.

The target, which is to be written into the Climate Change Bill, brings Britain into line with scientific advice. Mr Miliband said that tackling global warming was too important to be watered down even in a recession. “In tough economic times, some people will ask whether we should retreat from our climate change objectives,” he said. “In our view, it would be quite wrong to row back.”

Mr Sarkozy is desperate to fix each country’s share of the EU effort before January 1, when the European presidency is passed to the Czech Republic.

The Czechs have promised to use the presidency to scale back environmental demands. President Klaus has publicly questioned the existence of man-made climate change.

In the next few weeks there are likely to be a series of concessions and opt-outs offered to get everyone on board. Most of those trying to wriggle out of the targets are former Iron Curtain countries, which argued yesterday that they had already cleaned up the heavy-polluting industry that they inherited from the communist era.  Mr Sarkozy and José Manuel Barroso, the President of the European Commission, wanted agreement yesterday to ensure that four significant pieces of legislation needed to implement the targets were in place by December. These would set targets for each country’s commitment to boost renewable energy by 20 per cent by 2020; set out how the burden of other carbon dioxide cuts would be taken up by individual countries; enforce the latest version of the Emissions Trading Scheme; and envisage a 20 per cent increase in energy efficiency.

Unable to secure agreement, Mr Sarkozy and Mr Barroso managed to get all 27 nations to sign up to a summit conclusion that merely “confirms its determination to honour the ambitious commitments”. All mention of legislation in earlier drafts was banished and instead it proposed “appropriate responses to the challenge . . . having regard to each member state’s specific situation”.

Sarkozy’s demands :-

• Cut CO2 emissions by 20% by 2020 compared with 1990 levels (This would rise to 30% if there is a global climate change agreement)
• Ensure that 20% of fuel comes from renewable energy sources by 2020
• Increase energy efficiency by 20% by 2020, and ensure that 10% of transport runs on biofuels by the same year