Kyoto talks stall in dispute over carbon 'sinks'

The potential use of trees as "sinks" to soak up carbon dioxide from the atmosphere was emerging on Thursday night as the principal obstacle to saving the troubled Kyoto Protocol on climate change.

It was disagreement over "sinks" between the United States and the more environmentally-radical European countries which led to the collapse of the last round of talks on the treaty in The Hague in November. Then, the US wanted the carbon absorption potential of its vast forests offset against its target for reducing emissions of CO2 and other greenhouse gases under the protocol. The Europeans – although not Britain – saw this as a free ride for America, and a gigantic treaty loophole, and refused, in spite of a last minute deal attempt by John Prescott, and the talks fell apart.

The US is on the sidelines of the current talks, after George Bush's renunciation of Kyoto in March. But the same stubborn disagreement is shaping up in Bonn between the EU and America's allies, principally Canada, Russia, Australia and Japan. All of the so-called "umbrella group" have huge forests and want to be able to use them as sinks to reduce their protocol commitments.

Led by the Canadians, the four nations made it clear yesterday they wanted complete freedom to negotiate individual and substantial carbon sinks, rejecting the suggested compromise of a standard calculating formula by the conference president, the Dutch Environment Minister, Jan Pronk.

Canada, in particular, is seeking an enormous amount from its forests to be offset against its Kyoto targets, and Canadian officials said that without it, Canada will not ratify the protocol. Japan and Russia are also seeking big carbon sinks; the Australians, though not seeking a sink immediately, strongly support the principle.

But the greener European countries still see it as a loophole which will compromise the "environmental integrity" of Kyoto – that is, its ability to deliver real cuts in the amount of CO2 entering the atmosphere.

Although the suggestion has been widely made – not least by Britain – that the EU needs to be more flexible on the sinks issue, an unmistakable warning that the price might be too high was signalled yesterday by the Belgian energy minister (and Belgian Green Party member), Olivier Deleuze, who is leading the EU delegation.

He said: "We understand that Canada would like to negotiate sinks country by country. But there are 180 countries and we have three days." Mr Deleuze may play a similar pivotal role in the talks that was played in The Hague by the French Environmental Minister, Dominique Voynet, also a Green Party member, who as EU president refused to compromise over the Americans' sink demands. Mr Deleuze is as much of an environmental radical – he was previously a full-time green activist and was president of Greenpeace Belgium in the 1990s.

Britain's Environment Secretary, Margaret Beckett, who arrived yesterday with the Environment Minister Michael Meacher, may find herself brokering a deal between the umbrella group and the EU. It may be difficult, because Mr Deleuze's stance is not a lone one, and it was echoed by the European Environment Commissioner Margot Wallström, who rejected the suggestion that the talks in The Hague had broken down because the Europeans would not give way.

Sinks are not the only point at issue between the umbrella group and Europe. The camps are divided on how to enforce compliance with the protocol's rules, with the Europeans wanting legally-binding penalties for transgression, and the umbrella group strongly resisting the idea. Officials have been working on the issues since Monday and last night the discussions were taken over by Mrs Beckett and ministers from the other countries, who will try and hammer out a political compromise acceptable to all sides by Sunday night.