Luxembourg  - Billions of euros' worth of greenhouse-gas emission permits hung in the balance Wednesday as environment ministers from Eastern and Western Europe fought to break the European Union's deadlock on climate change.

Eastern members are fighting for the right to sell the permits, awarded to them by the Kyoto Protocol. But Western states say that using the permits would destroy efforts to stop global warming.

"It's very important for some of the Eastern European countries that they be allowed to bring these surplus (permits) into a new commitment period, but it's equally important for many others of us
(to make clear) that it will not work," Denmark's climate minister, Connie Hedegaard, told the German Press Agency dpa.

Unrestricted use of the permits would "undermine the whole position of the EU and the EU target after 2012," said Hedegaard, who is set to host crucial United Nations talks on fighting climate change in Copenhagen in December.

Under the Kyoto Protocol, countries which cut their emissions by more than a certain amount below 1990 levels can sell credits - "Assigned Amount Units" (AAUs) - based on those cuts to countries which emit too much, so that the latter do not have to pay fines for excess emissions.

The collapse of the Soviet Union and its massively polluting industrial base, which happened in 1991, has left countries such as Russia, Poland and the Baltic States with massive AAU reserves.

EU officials estimate that the former-Communist states hold AAUs equivalent to 7.5 billion tons of greenhouse gas, or one and a half times the EU's total annual emissions, with an estimated market value of some 75 billion euros (112 billion dollars).

Western states therefore say that if Eastern states are allowed to sell all their AAUs after a hoped-for Copenhagen deal comes into force in 2013, governments elsewhere will simply buy them instead of cutting emissions, thus crippling the fight against climate change.

"Poland and our other Eastern European friends think, very short-sightedly, that they can buy benefits by carrying over unused AAUs (to 2013), but this would destroy (emissions) markets," German Environment Minister Sigmar Gabriel warned.

But the Eastern states say that they cannot afford to give up such a potentially lucrative source of income.

On Tuesday, EU finance ministers hit deadlock over how to pay for the fight against climate change in a similar row between Eastern and Western member states.

Environment ministers were also set to debate whether the EU should set itself long-term emissions targets and impose goals on airlines and shipping companies.(dpa)