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The European Commission is under pressure to shelve plans to raise its target for greenhouse gas emission cuts from 20% to 30% amid fears that further uncertainty would be too damaging to fragile world markets.

The EU is planning to publish a paper this week urging carbon emission reductions targets for Europe’s biggest polluters to be raised to 30% by 2020, an announcement that is likley to cause a sudden surge in the price of EU Allowances, the European carbon permits.

Until now Europe has agreed only to cut emissions by 20% from 1990 levels. However, the commission believes this is not enough. It argues in a paper to be given to the 27 EU member states on Wednesday that “an EU target of 20% by 2020 is not enough to put emissions on to the right path” to reach the goal of limiting the rise in average global temperatures to 2C.

It estimates that the total cost of such a move would be some €81 billion (£70 billion) — just €11 billion more than originally predicted.

However, experts are insisting that the EU shelve the plans because of last week’s market turbulence caused by concerns over the euro and Europe’s growing debt crisis. Senior market sources are concerned that further pressure on Europe’s industrial giants to reduce emissions could send markets plummeting.

“The commission was hoping to issue a paper on the costs of a 30% reduction target. The events of the past few days may now put those on hold,” said one source.

The Sunday Times, 23 May 2010