After tough negotiations, EU leaders agreed to the world's broadest binding climate package, which French President Nicolas Sarkozy, the current holder of the EU presidency, called "historic."
Yet an agreement was reached only because of concessions to Eastern European member states as well as Germany and Italy, which had argued against certain elements of the plan, saying they would cripple their economies.
European Environment Commissioner Stavros Dimas said the agreement confirms Europe's determination to fight climate change.
"EU leaders have given their green light to a series of measures that puts Europe firmly on the road to becoming a sustainable, low-carbon economy," he said Friday in the western Polish city of Poznan, where delegates from 189 nations are wrapping up a U.N. climate conference aimed at paving the way for a global deal.
Yvo de Boer, the United Nations' top climate official, said the EU deal "sends a clear message to the negotiations in Poznan and onwards to Copenhagen" -- where a U.N. climate summit takes place in December 2009 -- "that difficult roadblocks can be overcome and resolved."
With the United States under Barack Obama expected to vigorously join global climate-protection efforts starting next year, the green light given now to the EU's so-called 20-20-20 goals comes at the right time, observers say.
European Commission President Jose Manuel Barroso, in a reaction to the Brussels deal, said Europe was ready to lead global climate efforts together with the United States.
But environmental groups said the EU had watered down its ambitious targets in order to please big business.
"Millions of poor people have been left in danger because EU leaders bowed to business lobby pressures and faltered at an historic moment," said Elise Ford of the international aid group Oxfam.
The World Wide Fund called the EU "feeble," and the Climate Action Network found this Friday to be a "very dark day for EU climate politics."
The EU held on to its goal to cut greenhouse gases by 20 percent, boost the share of renewables in the energy mix to 20 percent and reduce energy consumption by 20 percent -- all by 2020. It also preserved a pledge that it would shoot for a 30-percent emissions cut if the world's other big polluters agree to their own binding reductions at the end of the U.N. process, at a summit to be held in Copenhagen at the end of 2009.
But individual parts of the package had to be changed to accommodate the wishes of Germany, Europe's largest economy, as well as Poland and Italy, which both had threatened to veto the deal if their demands were ignored.
German Chancellor Angela Merkel and Italian Prime Minister Silvio Berlusconi won concessions for European industries, after Merkel last week already managed to soften emissions-reduction targets for Europe's car sector.
Berlin had feared that energy-heavy German companies would suffer when competing with rivals from countries that haven't signed up for a binding climate deal. These firms now will receive free emissions permits under the EU's emissions trading scheme if they meet certain benchmarks for using efficient technology.
Several Eastern European nations, led by Poland, had argued an unchanged package would cripple their economies. They feared a flood of massive costs because of their overwhelming reliance on dirty coal as an energy source.
They now will receive 70 percent of their emissions permits for free and have more time to adapt their power sectors to the auctioning of permits under the trading scheme.
The decision has to be signed by the European Parliament before it can enter into force.