BRUSSELS, JANUARY 28, 2008 (MALAYA) The European Unionís executive will adopt ambitious plans on Wednesday to make the 27-nation bloc a leader in the fight against climate change, but tradeoffs will include higher energy bills.

The European Commission will detail proposals to cut planet-warming greenhouse gas emissions by one-fifth and split among EU states a target to produce one-fifth of all power from renewable sources like the wind and sun by 2020.

The Commission wants to spur talks among industrialized countries for a global climate deal by 2009 to help arrest global warming which risks raising sea levels and causing more floods and droughts.

Brussels has had to fine-tune its plans to placate anxious industry leaders, who fear higher energy costs will tilt competitiveness further in favor of China and India, which have no emissions limits, at a time of record oil prices.

"If we were to relocate our industries outside Europe we would then have to transport steel to Europe, adding emissions," said Philippe Varin, president of the European Confederation of Iron and Steel Industries, and chief executive of Anglo-Dutch steelmaker Corus, owned by Indiaís Tata Steel.

The Commissionís plans will implement renewable energy and emissions-cutting targets agreed by EU leaders last March, and require approval by member states and the European Parliament.

Stiffest resistance will likely emerge over targets for each country to cut greenhouse gases and install renewable energy.

Business, meanwhile, has sought to soften a planned overhaul of the EUís Emissions Trading Scheme.

From 2013, power generators will have to buy all their permits to emit carbon dioxide under the scheme, EU sources said. They will pass the extra electricity costs on to consumers. Until now they got most permits for free.

Power bills for industry and households will also rise as a result of targets to supply more energy using clean energy technologies which are more costly than fossil fuels.

Higher bills were an inevitable result of efforts to arrest global warming, the Chief Executive of the British arm of the German utility E.ON, Paul Golby, said on Tuesday.

"The time of a cheap energy world is over," he told Reuters.

The Commissionís measures will cost around half a percent of the EUís combined wealth a year, or about 60 billion euros ($86.99 billion), Commission President Jose Manuel Barroso said this week. EU officials say they will add about 10 percent to electricity prices.

Fine print in final drafts went to the wire late on Tuesday, as EU officials faced a barrage of last minute lobbying from environmentalists, governments and energy-intensive business.

Industrialists from the steel, cement, aluminum sectors seemed to have won their case, and will get their fixed quota of emissions permits for free from 2013, paying more over time.

Leaders of the steel sector were among the last to lobby Environment Commissioner Stavros Dimas on Tuesday, warning they would be forced to shift production outside Europe if emissions curbs and costs of auctioning emissions permits put them at a competitive disadvantage against rivals in China or India.

Chief News Editor: Sol Jose Vanzi

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