EU nations must invest more in energy efficiency and green technologies in order to retain economic advantages, the European Commission is to urge.
The commission will shortly issue a road-map to 2050 on climate and energy.
Its key message is that the bloc risks losing out to competitors that are putting more money into these areas - especially if oil and gas prices rise.
However, as we reported on Friday, the commission is not explicitly urging new targets for cutting EU emissions.
The final version of the road-map - seen by BBC News - makes the economic case for toughening the current target of a 20% cut from 1990 levels by 2020.
"In order to be in line with the 80-95% overall greenhouse gas reduction objective by 2050, the road map indicates that a cost effective and gradual transition would require a 40% domestic reduction of greenhouse gas emissions compared to 1990 as a milestone for 2030, and 80% for 2050," it says.
And the most cost-effective pathway to these targets would take the bloc through a 25% greenhouse gas cut in 2025.
But it also says: "This Communication does not suggest to set new 2020 targets, nor does it affect the EU's offer in the international negotiations to take on a 30% reduction target for 2020, if the conditions are right".
In parallel with the road-map, the commission is also publishing proposals on how EU nations can push ahead faster with increasing energy efficiency.
Back in 2008, the bloc set three parallel targets for 2020:
* cutting emissions by 20% from 1990 levels
* delivering at least 20% of its energy from renewable sources
* increasing energy efficiency by 20%
The bloc is on target to achieve the first two, but not yet the third.
Calculations done for the road-map show that if that is achieved on top of the renewables target, emissions will fall 25% from 1990 levels by 2020 without the need for any extra measures - which is one of the reasons why climate campaigners have been urging the bloc to set a tougher target than 20% by 2020.
The other strand to their argument is that the recession caused such a large fall in emissions that from hereon in, achieving 20% by 2020 involves cutting emissions slower than the EU has done historically.
Fossil industries
The Communication - which will be formally issued on Tuesday afternoon by Energy Commissioner Gunther Oettinger and Climate Commissioner Connie Hedegaard - is largely based on forecasts of how Europe's economy would perform under various pathways designed to meet the long-term goal of an 80-95% cut in emissions from 1990 levels by 2050.
A key factor in those forecasts is the price of fossil fuels. If oil and gas prices rise, that makes the economic case for efficiency gains stronger, and makes renewables and nuclear power more competitive.
The price of oil has approximately doubled since 2005, it says, with further hikes likely.
"Taken over the whole 40-year period, it is estimated that energy efficiency and the switch to domestically produced low carbon energy sources will reduce the EU's average fuel costs by between 175-320bn euros ($244-448bn) per year."
The transition will also generate jobs, it concludes, noting that the number of people working in the renewables industry has more than doubled over the last five years.
"In the longer-term, the creation and preservation of jobs will depend on the EU's ability to lead in terms of the development of new low carbon technologies," it concludes.
Countries such as China and South Korea have spent much bigger proportions of their stimulus budgets on green measures that the EU did.
The commission projects that serious investment could increase the total number employed in this sector to 1.5 million by 2020.
One block to achieving this level of investment is the low price of carbon - driven largely, again, by the fact that the recession meant companies achieved emission cuts without having to pay for them. So there is a surplus of allowances to emit.
The commission concludes that "appropriate measures" for keeping the price high "need to be considered, including recalibrating the EU Emission Trading Scheme by setting aside a corresponding number of allowances from the part to be auctioned during the period 2013 to 2020 should a corresponding political decision be taken".
Behind the scenes, there has been an intense war of words between opposing camps, with Ms Hedegaard and her allies arguing for tougher emission caps and Mr Oettinger's camp contending this would lead to the "de-industrialisation" of Europe.
Member states have taken different positions, and in some there are differences between various ministries in a single country. Business too is split, with some companies agreeing with Mr Oettinger and others backing the line taken in the road-map, that delaying investment now will jeopardise competitiveness.
"Over the last few weeks, lobbyists for Europe's dirtiest corporations have frantically sought to strip the European climate plan of any ambition whatsoever - but they have failed," said Ruth Davis, chief policy adviser at Greenpeace.
"The case for Europe making a 30% cut is now just unarguable, and should happen without a reliance upon offsets from abroad."
The road-map will be debated by member states through the European Council, and by the European Parliament.
What emerges at the end of that process will become EU law.
source : bbc.co.uk
