* Micronesia challenges renovation of Czech power plant
* Says emissions could threaten its survival
* Case could lead to more cross-border CO2 challenges
By David Fogarty and Michael Kahn
SINGAPORE/PRAGUE, Jan 18 (Reuters) - A challenge by the tiny Pacific state of Micronesia to block refitting of a big European power plant might seem like a David and Goliath struggle, but to the country's 110,000 people it is a battle for survival.
The Federated States of Micronesia -- a chain of more than 600 islands dotting the west Pacific -- is objecting to plans to renovate a lignite-fired power station in Prunerov in the Czech Republic, saying the plant's carbon emissions are a direct threat to the nation's future.
Lignite is brown coal, the most polluting and least efficient type, and Micronesia says the Prunerov plant is one of the world's biggest single industrial sources of planet-warming carbon dioxide, the main greenhouse gas.
The issue could become a test case for other small island states across the globe that say they are similarly threatened by CO2 emissions from big polluting nations and industries.
Micronesia says higher CO2 emissions means rising seas that could flood part of its territory. A warmer world could also unleash more intense and damaging storms.
In December, the Pacific state asked the Czech environment ministry to consider the cross-border impact of carbon emissions from the Prunerov plant operated by CEZ CEZPsp.PR. It sent another letter this month.
"Climate change is real and it is happening on our shores. It's a matter of survival for us. If you look at the map of the Pacific, we're just dots in the middle of the ocean," Andrew Yatilman, the director of Micronesia's Office of Environment and Emergency Management, told Reuters.
The Prunerov project emitted 40 times more CO2 annually than the whole of Micronesia and the government believed the planned refitting would not use the best available technology, he said, echoing concerns expressed by Greenpeace and environmental lawyers involved in the case.
However, CEZ told Reuters it does plan to use the best available technology and that this had been confirmed by an expert nominated by the environment ministry.
"In Prunerov II, there will be new and modern technology, given for this project. The efficiency will increase from current 32.8 percent to 39.06 percent," a spokeswoman said, adding emissions of CO2 and other pollutants would also fall.
The new plant would have three blocks with a capacity of 250 megawatts each, instead of five blocks of 210 MW each now.
The Czech government is studying the environmental impact of the Prunerov extension and was close to completing the review when it received Micronesia's request.
The Czech environment ministry told Reuters it would include Micronesia's comments in its final statement, while Yatilman said he hoped the Czech government would give the project a negative assessment.
"We hope the letter will influence their decision. We're hopeful that they will take that into consideration," Yatilman said, adding that the government would await the outcome of the assessment before deciding on its next step.
Under EU law, transboundary environmental impact assessments are part of normal procedure.
But this is believed to be the first time "one state has sought to invoke the laws of a second state in order to reduce the climate impacts on the first state", said Peter Roderick, a veteran climate change lawyer and co-director of the Climate Justice Programme.
"I think it could become a test case in legal terms in the Czech Republic, if it goes to court, in that it could establish an important legal principle, namely that transboundary impacts of greenhouse gas emissions must be considered in EIA processes," he told Reuters in response to e-mailed questions.
He said the decision of a Czech court would not bind the courts of other countries but it would be of interest and possibly persuasive, especially in EU countries.
"The participation of Micronesia in the transboundary assessment procedure could create an important precedent," Jiri Nezhyba, a Czech lawyer involved in the case, told Reuters.
Yatilman said he had heard of the Prunerov extension through Greenpeace and thought the challenge a perfect opportunity to highlight the climate change plight of small island states after last month's Copenhagen climate conference.
Many small island states such as the Maldives, Tuvalu and Kiribati wanted Copenhagen to deliver a pact to limit the global average temperature increase to 1.5 degrees Celsius and ramp up climate aid for most vulnerable nations.
But many nations considered the final Copenhagen Accord too weak and too vague.
Yatilman said Micronesia might also fight projects elsewhere.
"All will depend on what kind of information is available to us -- information on power plant projects. Either we hear in the news or from other sources," he said. (Additional reporting by Jan Korselt; Editing by Himani Sarkar)