EU Climate Pact in Crisis Ahead of Summit

French attempts to craft a global warming pact to make the EU a world leader in tackling climate change are gridlocked, with governments unable to agree on how to share the pain and costs of slashing greenhouse gases by 20% within 12 years.

A European summit tonight in Brussels will fail to agree on the means to the end of meeting the EU's ambitious targets, warned diplomats and officials.

The deal has to be struck by the end of the year for the package, which was agreed unanimously by European governments 18 months ago, to become European law.

But senior officials and diplomats doubt whether that will be possible despite the fanfare that accompanied the unveiling of the policy last year.

"The targets have been agreed and we have presented them all over the world," said José Manuel Barroso, the European Commission chief. "There will be a real problem of credibility for Europe."

He added: "Saving the planet is not an after-dinner drink, a digestif that you take or leave. Climate change does not disappear because of the financial crisis."

Nicolas Sarkozy, France's president and current EU president, has been told that his proposals for tonight's summit have no chance of being supported, with some of the 27 countries arguing that the financial crisis means that the Europeans can no longer afford the huge costs entailed.

"In this difficult situation, it's only natural that governments become more defensive and prudent," the European Commission chief said.

On Monday, Franco Frattini, the Italian foreign minister, told a meeting of his European counterparts that, with Europe heading into recession, the entire complex package should be renegotiated.

The foreign secretary, David Miliband, opposed the Italian demands, arguing that if Europe was grappling with the credit crunch, it also was confronting a "resource crunch" that made the climate change package all the more urgent.

But while British ministers say they support the plan, they are also trying to water down some of its key provisions. The energy and climate change secretary, the foreign secretary's brother, Ed Miliband, last week failed to get the rest of the EU to exempt the aviation sector from a central element of the climate change package - that which obliges Europe to obtain 20% of its energy mix from renewable sources by the 2020 deadline.

Sarkozy's effort to build a consensus has already seen him scale back his ambitions, according to sources. But he has still encountered a wall of insuperable opposition on several fronts.

The heart of the plan is the so-called emissions trading scheme which forces European industries to buy permits to pollute, encouraging them to save money by becoming cleaner.

But amid furious objections, particularly from Germany, Sarkozy has proposed that especially energy-intensive industries such as the steel, aluminum and cement sectors be awarded their pollution permits for free to prevent them abandoning Europe and moving their business elsewhere. Britain and others reject the blanket exemption for these sectors.

However, there is also widespread concern that Europe will simply export jobs and businesses without making any difference to carbon dioxide emissions.