Blair hails 'bold' EU deal to slash carbon emissions and boost renewable power

Europe yesterday claimed leadership of the global battle against climate change as it agreed to slash carbon emissions and generate one fifth of its energy from renewables including solar and wind power.

At the end of a two-day summit, and after intensive cajoling from the German Chancellor, Angela Merkel, EU leaders signed up to a series of binding targets which will mean a dramatic change in the way Europe powers its economies.

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However, they also gave comfort to countries that rely heavily on nuclear power, suggesting that they may be allowed to adopt less ambitious targets for generating wind, solar or hydro-electric power.

Yesterday's agreement commits the EU to a 20 per cent reduction in carbon emissions from 1990 levels by 2020 - though that will rise to 30 per cent if other nations follow suit. It also promises that, by the same date, one-fifth of EU energy will be derived from renewables - though the effort will not be shared equally among all 27 nations.

The environmental campaigning group Greenpeace hailed the deal as "the biggest such decision since the adoption of the Kyoto Protocol". Nevertheless, yesterday's landmark agreement is just the beginning of a period of intensive wrangling over how the burden will be shared.

Renewables account for less than 7 per cent of European energy, and detailed targets will now be drawn up for each of the 27 nations.

The accord was hailed as a vital signal to the rest of the world, and one that will help the EU convince other countries, including the US, China and India, to follow suit. Officials also said that, by setting an ambitious target for renewables, the summit had created a powerful incentive to industry to invest in new technologies.

Announcing the deal, Ms Merkel said that there was "time still to reduce global warming to below 2 degrees," adding: "We could avoid what could well be human calamity."

Tony Blair also claimed credit for the agreement, which he described as "bold and ambitious", adding: "There is some pride in our country because this agenda very much grew out of what we tried to do in our G8 presidency, and in our presidency of the EU. It is tremendous to think that 18 months later we have what I think is a historic summit."

But the rhetoric concealed the deep divisions which had to be overcome in order to get an agreement in principle. The deal was a personal triumph for Ms Merkel, who won over leaders such as Mirek Topol-anek, the Czech Prime Minister, who had described the targets as "nonsensical".

To reassure sceptical countries, including several in eastern Europe, individual nations were promised they would have an effective veto over their detailed plans to hit targets.

These will be worked out in partnership with the European Commission, which will produce a plan under which nations that are already advanced in renewables will go further to compensate for the laggards.

Yesterday's deal promises "differentiated national overall targets" put together "with due regard to a fair and adequate allocation taking account of different national starting points including the existing level of renewable energies and energy mix".

Overall, however, the EU will have have to hit the 20 per cent target, and the European Commission has promised to enshrine the plans in legislation.

That means that, if countries fail to hit their specific national objectives, they can be taken to the European Court of Justice. Jose Manuel Barroso, the European Commission president, said: "We can say to the rest of the world, Europe is taking the lead. You should join us fighting climate change." EU leaders also set a 10 per cent target for bio-fuels in transport by 2020 to be implemented in a cost-efficient way.

However, they endorsed only a watered-down plan to liberalise the European energy market. Instead of forcing the big utility groups to sell off their generation businesses and distribution grids, they opted for a more modest reform. This involves "effective separation of supply and production activities from network operations".

The targets

* 30 per cent greenhouse gas reductions on 1990 levels for developed countries by 2020 if other big polluters come on board

* Binding unilateral target for a 20 per cent reduction in greenhouse gases for the EU

* One fifth of EU energy to come from renewable sources by 2020 in binding target

* Biofuels to account for 10 per cent of EU transport power by 2020. Also binding target

* Greater separation of energy generation and distribution without breaking up utility giants

* New push on carbon capture and storage technologies

* Plans for a strategic energy review every two years

* Energy efficiency savings of 20 per cent by 2020

* Nuclear power recognised as helping to curb C02 emissions and secure energy supplies

* High-level group foreseen on nuclear safety and waste management issues

* New co-ordinators to speed up interconnections between nations

* Energy observatory to be created in the European Commission