As part of its drive to lead the world in fighting climate change, the 27-country EU has committed to cutting carbon dioxide emissions by one fifth by 2020, compared to 1990 levels.

It is also considering increasing the cut to 30 percent if big countries such as China and the United States commit to their own reductions.

But members of the European Parliament's influential industry committee are mulling an amendment that would demand a full impact assessment before cutting beyond 20 percent.

Any such move to extend cuts would also be subjected to full legislative scrutiny by the EU's member states and EU lawmakers before becoming law.

"This would make it much harder to move to 30 percent cuts automatically, as the EU would have to go through the whole co-decision procedure, and it could even prevent it altogether," WWF campaigner Kirsty Clough said on Thursday.

Industry committee members returning to work this week are also considering amendments to alter the EU's flagship Emission Trading Scheme (ETS) so it has less impact on energy-intensive industries such as steel.

The ETS seeks to put a cap on EU emissions by making polluters pay for permits to emit carbon dioxide, the main greenhouse gas blamed for climate change.

FREE

The power sector, which now gets most of its permits for free, will have to pay for all of them from 2013, under European Commission proposals.

The power sector passes on the extra cost of carbon emissions permits to consumers, but companies which operate in globally competitive markets such as the steel sector are less able to do that.

EU steelmakers say the current plans could cost the sector more than 50 billion euros (US$78 billion) between 2013 and 2020 and put thousands of jobs at risk. The European Commission is considering whether to allow steel and other energy-intensive industry to continue to get free permits from 2013.

The steel industry is particularly worried changes would require steelmakers to buy CO2 emissions permits for electricity that it produces by recycling waste gas from blast furnaces.

The industry committee's proposed changes would exempt electricity produced from waste heat or gases, the document of "compromise amendments" shows.

Energy-intensive industries are also worried about power producers passing on the cost of carbon permits to electricity prices, stoking energy costs. But the new amendments foresee additional emissions permits for industry to balance that out.

"However ambitious we are with climate legislation, we can't make European companies uncompetitive in the global market, particularly high energy users, and that's what the Industry Committee will be looking at," said Welsh socialist MEP Eluned Morgan.

But WWF's Clough warned such moves reduced the incentives for energy-intensive industries to look for ways of reducing power consumption. (Editing by Gerard Wynn)