LUXEMBOURG - Talks on a new U.N. climate deal stumbled on Tuesday when European Union finance ministers failed to agree funds for poor countries and India reiterated demands for aid to help curb its emissions.

An impasse among finance ministers from the 27-nation EU means the issue of EU aid to developing countries -- a sticking point in talks on a U.N. pact to fight global warming due in December -- will be passed on to an EU summit on October 29 and 30.

It is a disappointing outcome, Swedish Finance Minister Anders Borg, whose country holds the 27-country bloc's presidency until the end of the year, told reporters after talks failed in Luxembourg.

Nine of Europe's poorer countries, led by Poland, demanded their own economic circumstances be taken into account before the EU agrees up to 15 billion euros ($22.5 billion) in financial aid for developing nations.

Developing countries say they cannot cut emissions and adapt to changing temperatures without help from industrialized nations, which grew rich by powering their industries with hydrocarbons and polluting the atmosphere.

Earlier, India's Environment Minister Jairam Ramesh rejected an Indian newspaper report that he was willing to drop a long-standing demand for foreign aid and technology as the price for accepting international curbs on India's rising emissions.

Dropping such a link would have been a big concession for the December 7-18 U.N. climate conference in Copenhagen. India is the fourth biggest emitter behind China, the United States and Russia.

Ramesh said in a statement India would agree to international monitoring of emissions only when such actions are enabled and supported by international finance and technology.

The 190-nation U.N. talks are bogged down over how to share out greenhouse gas curbs between rich and poor nations as part of an assault meant to avert ever more heat waves, rising sea levels, floods and more powerful storms.

CARBON CURBS

In Washington, Energy Secretary Steven Chu said the United States should focus on reducing its own emissions before outlining how it might place carbon tariffs on energy-intensive goods from developing countries such as China and India.

We don't need to go there at this moment, Chu told the Reuters Washington Summit. Carbon tariffs were featured in the climate bill the House of Representatives narrowly passed in June but are bitterly opposed by developing countries.

In the debate on aid, the EU's executive, the European Commission, suggested last month the bloc provide up to 15 billion euros ($22.46 billion) a year by 2020 to break the impasse.

In business, Toyota Motor Corp said it would step up a push for gasoline-electric hybrid cars. The world's largest automaker said it aimed to sell 36,000 of its new Sai hybrid in Japan a year, taking another step toward its goal of selling 1 million hybrid vehicles a year worldwide soon after 2010.

Honda's Chief Executive Takanobu Ito, who had previously acknowledged Honda might need pure electric cars to meet tough regulations in California, told an industry seminar he would consider launching electric cars for Europe, Japan and other markets as well.

There is no change to my view that hydrogen fuel-cell cars will in the end be proven the best, Ito said. (But) electric vehicles will also be a core option for cars in the future.

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