The European Union’s 490 million citizens will have to use energy-efficient lighting by the end of the decade, EU leaders have decided.

"We're not saying people should throw out all the bulbs in their house today, but people should start looking at what's in the shops," said German Chancellor Angela Merkel, who chaired the summit, in a news conference.

The news coincides with an EU agreement that a fifth of the bloc’s energy will come from green power sources by 2020.

The decision is a potential business opportunity for manufacturers such as Philips and Siemens-owned Osram. But the current generation of compact fluorescent lamps (CFLs) last eight years, which means manufacturers will sell far fewer lights, although the price point for CFLs is higher.

Last week, the chief executive of Royal Philips Electronics NV’s lighting division said European light bulb makers were close to an agreement in principle to work together on phasing out incandescent bulbs for the consumer market.

Philips is the largest lighting maker globally, followed by Siemens AG, known for the Osram-Sylvania brands. General Electric Co., whose founder Thomas Edison patented the incandescent bulb in 1880, is biggest in the United States.

Theo van Deursen said “the tipping point is very close, to be frank, for the (European) lighting industry” to agree on a phase-out of incandescent bulbs in the home.

He also criticized GE for its plans to introduce a new generation of energy-efficient incandescent bulbs by 2010 (see GE reinventing the incandescent light bulb.)

California Assemblyman Lloyd Levine introduced legislation to make his state the first to ban incandescent lightbulbs. Earlier this week, Australia announced it would phase out incandescents and Greenpeace asked India to follow Australia’s lead. Wal-Mart has set a goal of selling 100 million CFLs by 2008.

Last month, Australian lawmakers agreed to use both persuasion and regulation to phase out incandescent light bulbs completely within three years.

Some industry observers are concerned that CFLs contain mercury, a neurotoxin, and that manufacturers, retailers, and governments haven’t come up with effective ways to recycle them.