After sealing an ambitious climate change pact by making generous concessions to the big polluters in European heavy industry, European leaders last night announced they were leading the world towards a low-carbon future.

 

The 27 government leaders held the two-day summit in Brussels. With this pact ended a two-year effort to agree mandatory reductions in greenhouse gas emissions in Europe. It came as a major victory for French President Nicolas Sarkozy who is at present the president of the EU.

 

The French navigated a route through conflicting claims from Poland, Hungary, Germany and Italy to finalize a deal that keeps the EU's main carbon dioxide reduction targets intact, while easing the costs of the package for European manufacturers and heavy industry.

 

The climate accord orders Europe to cut greenhouse gas emissions by 20% by 2020 compared with 1990 levels. This is to be achieved through national reduction targets which vary among the 27 countries, and through a Europe-wide carbon trading scheme in which industries and power plants buy permits to pollute from 2013.

 

The rules for the emissions trading scheme, however, were relaxed under German pressure to exempt most companies in the processing industries, such as steel and cement, from paying for the permits, and power stations in central Europe, mostly coal-fired, were awarded large discounts on the price of carbon.

 

The decisions, to be turned into law by the European parliament next week, also cut CO2 emissions from cars by 19% by 2015, set binding national targets for renewable energy to total 20% of the European energy mix by 2020, encourage the use of "sustainable" biofuels, and order 20% greater energy efficiency by 2020.

 

The package also includes provision for 12 pilot projects on carbon capture and storage, using novel technology to collect CO2 emitted from power stations and buries it underground where it cannot warm the world.

 

The projects are to be funded from the proceeds of the carbon trading, which is supposed to generate tens of billions in revenue by 2020. Under British prodding, the summit agreed to double the funding available for these projects.