Page last updated at 00:05 GMT, Monday, 30 June 2008 01:05 UK

Green target 'to hike fuel bills'

Power station chimney (Image: PA)
Businesses and consumers will pay for EU's 2020 green targets

UK households could see their annual energy bill rise 20% to pay for the cost of meeting the EU's 2020 emissions target, Ernst & Young has predicted.

The accountancy firm's report estimates that the UK would have to stump up 100bn for the capital investment needed to satisfy Europe's green goals.

The EU wants European countries to cut carbon dioxide levels by 20% by 2020.

It also wants member states to raise the proportion of renewable energy they use to 20%.

The report, called Costing the Earth, says UK households could not easily afford higher energy bills at a time of record food and fuel bills.

The potential rise in utility bills would push more consumers into fuel poverty, according to one of the report's authors.

"Customers face a triple whammy - rising fuel and oil prices, the cost of climate change mitigation, and on top, the additional investment required to become more energy efficient, for example by insulating the home," said Simon Harvey, of Ernst & Young.


The survey also found that despite headlines about rising fuel bills, customers were not aware of the impact the EU's green targets would have on their finances.

Half of those polled said they would not be prepared to cut energy consumption, even if they faced higher bills.

"There seems to be a worrying degree of apathy among consumers to reduce energy consumption," he added.

The 2020 plan set out by European Commission President Jose Manuel Barroso has been criticised by business groups who fear the switch green power will cost more and hit company profits.

In the UK, the government recently announced its strategy to meet Mr Barroso's ambitious target.

Energy Minister Malcolm Wicks said Britain would undergo a 100bn "green revolution", with plans to fit a quarter of British homes with solar heating panels and erect thousands of new wind turbines.

Britain currently gets less than 5% of its electricity from renewables, mainly wind.

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