By Jeff Mason BRUSSELS, March 8 (Reuters) - European Union leaders will put their weight behind ambitious goals to fight climate change on Thursday in a move Germany hopes will spur similar action from the United States and other big polluters worldwide. Leaders from the EU's 27 nations are set to back a target to cut greenhouse gas emissions blamed for global warming by 20 percent by 2020 compared to 1990 levels, shifting to up to 30 percent if industrialised and big developing countries join in. German Chancellor Angela Merkel, who holds the rotating presidencies of the EU and the Group of Eight rich nations, said she would use Europe's pledge to press the G8 to follow suit. "The more ambitious and challenging the targets are from this council, the easier it will be for us as the G8 president to say: Europe has taken its own important step and now others -- the United States, China, India and the big emerging countries -- must follow," she told reporters on Wednesday. "I believe Europe can be a role model. Europe has to commit itself, but then Europe has good prospects for getting into dialogue with other countries to do their share, and the German G8 presidency will be lobbying for that." Leaders from the G8 nations plus Brazil, China, India, Mexico and South Africa meet in Germany in June. The EU produces about 14 percent of the world's greenhouse gas emissions. The United States produces 25 percent. Europe aims to use its targets to negotiate an international agreement to extend the Kyoto Protocol past 2012. But the bloc is divided about how best to meet its goals. A German push for a binding target to make renewable energies such as solar and wind make up 20 percent of energy consumption by 2020 will likely fail. ENERGY SHAKE-UP The European Commission, which drafted the proposals to form a common EU energy policy, says non-binding targets do not work. Renewables currently account for less than seven percent of the EU energy mix, off a voluntary goal to reach 12 percent by 2010. "The objective of 20 percent renewable energy in 2020 is... something that can only be achieved if you include in the figure the contribution of nuclear energy," Ernest-Antoine Seilliere, president of lobby group BusinessEurope, told Reuters. Nuclear is not considered a renewable energy source, and EU states differ strongly on its merits. The Czech Republic and Slovakia hope to promote nuclear at the summit, diplomats said. The bloc is also at odds about how to unite electricity and gas markets and open them up to more competition. The Commission proposed that big utility groups be forced to sell or separate their generation businesses and distribution grids in a process called "ownership unbundling". Governments have given that a cool response, but signals from the summit will still be scrutinised for moves that could affect big players including Germany's E.ON <EONG.DE> and RWE <RWEG.DE> as well as Gaz de France <GAZ.PA> and EdF <EDF.PA>. "Issues of regulation and of fair and open competition are very important in the energy sector, but I do not believe that ownership unbundling is the only tool that we can use to achieve these objectives," Merkel said on Wednesday. EU leaders will, however, endorse a plan for biofuels to make up at least 10 percent of vehicle fuels by 2020.
