A number of European industrial groups are scaling back investments because of new laws compelling them to pay for the right to emit greenhouse gases, the energy industry association has said.
Johannes Teyssen, vice chairman of the World Energy Council, which represents groups in 96 countries, and chief operating officer of German utility E.on, said every week a project was being axed.
Mr Teyssen cited the recent cancellation of plans for several coal-fired power plants in Germany.
He explained both increased costs and the EU commission's "rigid and tough" view to force firms to buy greenhouse gas emissions permits from 2013 contributing to the drop off in investment.
The EU commission last month said industrial polluters will have to bid for quotas to emit greenhouse gases as part of the emission trading system.
EU energy chief Andris Piebalgs said: "Security of energy supply and sustainability go hand in hand and figure prominently on the EU's energy agenda.
"But facing these challenges means that we must know our weaknesses, that we engage in strong ties with our energy partners and last but not least, it means investing in the energy technologies of the future today."
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