London (Platts)--4Dec2008

European Energy Commissioner Andris Piebalgs is optimistic that the
European Commission's proposals to cut EU carbon emissions by 20% by 2020,
boost renewable energy by 20% by 2020 and cut overall energy consumption by
20% by the same date will be formally endorsed by member states in the coming
days.

Environment ministers from national governments are to vote on three
specific measures at their Environment Council meeting in Brussels Thursday.
These are a directive to improve and extend the EU's emissions trading scheme
including proposals on auctioning allowances; a decision on how member states
will meet the EU's overall emissions reduction targets; and a directive on
carbon capture and storage.

The package also includes a new renewable energy directive, that falls
within the remit of energy ministers, so will be discussed at the Energy
Council on December 8. The package will then be voted on by the European
Parliament at its session in Strasbourg on December 17.

"These directives mark an important step forward in efforts to improve
security of supply. We're near to the end and it is clear from the consensus
that is emerging that what we have achieved will be excellent," Piebalgs told
journalists ahead of the environment council meeting.

Representatives from national governments and the European Parliament
have been in negotiations over a final text that is acceptable to both after
some member states, notably Poland and Italy, expressed concern that the costs
of meeting the EU's climate change goals are too high to bear in the current
economic environment. Poland, in particular, is concerned about the impact of
emissions allowance auctioning on its power sector, which is dominated by
aging coal-fired plant.

As well as the climate package, environment ministers are also to discuss
a progress report from the current French presidency on a recast of the
integrated pollution prevention and control directive, which limits industrial
emissions, including emissions from fossil-fired power plants.