INTERVIEW-EU environment chief plays down ETS impact on power

By Pete Harrison

PARIS, July 4 (Reuters) - The European Union's environment chief said on Friday Poland had overstated the impact on electricity prices of EU efforts to tackle climate change.

Environment Commissioner Stavros Dimas also told Reuters the EU's proposals to curb carbon dioxide emissions would not be derailed by a growing wrangle between eastern and western states and the bloc is on track for a deal by year-end.

Eight eastern states are pushing for the EU to ease their pain by overhauling Europe's Emission Trading Scheme (ETS), the EU's main tool in the battle against climate change that makes companies pay for permits to emit CO2.

Poland, which gets about 90 percent of its power from carbon-intensive coal, wants power companies to receive free CO2 permits for longer to prevent electricity prices rising.

Poland says EU plans to make power producers pay for their CO2 permits from 2013 would push up power prices by 50-70 percent.

"We do not agree with their calculations," Dimas told Reuters on the sidelines of a meeting of EU energy and environment ministers in Paris. "There could be a 10-15 percent increase, and this is over a period of time."

France, which took over the EU's rotating presidency this week, has made climate change its top priority and hopes the informal three day meeting in Paris will identify the main areas of friction.

"Yesterday, I think we made considerable progress," said Dimas. "Prospects are very good for an agreement by the end of the year."

The EU plans to cut carbon dioxide emissions by a fifth by 2020 compared to 1990 levels, but the goal could be raised to 30 percent in the event of an international climate accord, which many now see as inevitable. (Reporting by Pete Harrison; Editing by David Brunnstrom)