EU still not united on climate change package

European ministers warned Thursday of tough talks ahead if the EU is to seal a major climate change accord this month, amid demands from Germany, Poland and others to protect their industries.

"The negotiations have reached a crucial phase... We have got 90 percent of the way there," French Environment Minister Jean-Louis Borloo told reporters at a meeting in Brussels with his EU counterparts.

"The hardest points, the other 10 percent, are best left to the heads of state and government to conclude," at an EU summit next Thursday and Friday, he said.

The European Parliament would then support, or reject, the package in its entirety when it meets on December 17.

EU nations last year agreed a broad plan including cutting carbon dioxide (CO2) levels by 20 percent by 2020 compared to 1990, 20 percent cuts in energy use through efficiency measures and 20 percent of energy needs coming from wind, water, solar and other renewable sources, again by 2020.

But they have since sought to protect their own industries and economies.

The French EU presidency is pushing to conclude a deal before it hands over the reins to the Czech Republic on January 1.

The greater goal is to have a strong and unified European position to encourage the rest of the world at international climate change talks in Copenhagen in a year's time.

However before the environment ministers had even sat down, German Chancellor Angela Merkel amply demonstrated the problems that remain in reaching agreement.

"We are going to defend our positions," Merkel told parliament in Berlin.

Germany, Europe's biggest economy, and Poland are leading opposition to the scheme under which rights to pollute would have to be bought.

Berlin wants most emissions allowances to be free for industry, whereas the EU proposals would have the percentage auctioned off gradually increased up to 100 percent in 2020, when every tonne of CO2 will have to be bought.

Borloo refused to be drawn on Merkel's comments: "Forget this idea of goodies and baddies" on the issue, he said.

The trading scheme was just one of the problems he identified in a speech to the European Parliament before chairing the Brussels talks.

Poland and other eastern European nations also want special dispensations in the carbon dioxide emission rules because of their dependence on coal for power.

The German and Polish environment ministers did not attend Thursday's talks, leaving lesser officials to take their place.

The French have made great efforts to get Poland on side and appeared to have made progress with its latest concessions, including ways to keep carbon costs down if the auction price soars.

Poland's Prime Minister Donald Tusk said Wednesday an agreement was "close".

"I think that we are close to a version acceptable for Poland... a version that will allow us to avoid a veto," he told reporters.

However a Polish official in Brussels Thursday laid out a new condition, calling for the carbon trading system to be delayed for his country beyond the proposed date of 2016.

Tusk and other eastern European leaders will met in Gdansk, Poland with French President Nicolas Sarkozy on Saturday for climate talks.

Italian Prime Minister Silvio Berlusconi may also prove difficult to persuade, fearing industry could move elsewhere where such costs and restrictions do not apply, the so-called "carbon leakage" effect.

EU Environment Commissioner Stavros Dimas stressed that energy efficiencies and the development of new, cleaner technologies would be good for Europe's economy as well as the environment.

He added confidently "the fact that we have made such great progress guarantees us that we are going to have an agreement in a few days."