Minister for Finance Brian Cowen has warned that the EU's flagship climate change package should not be allowed to undermine the competitiveness of the Irish economy.

He also confirmed yesterday the Government would lobby the European Commission to amend its plan, which set Ireland the toughest target for cutting CO2 emissions in the EU.

"What we want is a fair transparent system of burden sharing which takes into account legitimate national concerns, and try to find a way that it does not undermine the European or Irish economy," said Mr Cowen at a meeting of EU finance ministers, which discussed a draft EU plan that asks Ireland to cut CO2 emissions by 20 per cent by 2020.

He made his comments as an analysis of the EU plan by the Irish Institute for European Affairs warned that it could force a "fundamental restructuring" of the Irish economy. In a policy paper published this week, the institute warned that if a global deal on emissions cuts was successful next year, Ireland could face cuts of up to 30 per cent in CO2 emissions by 2020, when compared to the level of greenhouse gas emissions in 2005.

Mr Cowen said there were issues that were particular to Ireland that may not have been taken into account by the commission such as Ireland's GDP per capita figure, which is artificially inflated by the profits generated by multinationals. He also mentioned cross-Border petrol purchases by Northern Irish citizens, which inflate Irish CO2 emissions, and the importance of the agricultural economy to Ireland - a major contributor of emissions.

Under the draft EU plan, a state's ability to invest in overseas renewable energy projects to offset emissions at home are strictly limited. This is also an area in which Ireland is likely to seek changes to the commission's draft plan, which must still be approved by member states.

Mr Cowen added: "I think that there is an examination that has to take place that may show the commission may not be fully au fait with all the characteristics in Ireland."