Dairy firms concerned over carbon limits

The State's plan to cut carbon dioxide emissions threatens to scupper efforts to reorganise the milk processing industry, two of the country's biggest dairy companies have warned.

Urgently seeking last-minute changes from the Environmental Protection Agency, Glanbia said it was "extremely perturbed" by the proposed emission limits.

The EPA will formally sign off on the new regime later this month before it comes into force throughout the European Union on January 1st for the biggest energy users. Under the EPA licences issued in September, co-operatives and other dairy processors would have to surrender CO2 licences if they close plants.

However, the "Strategic Development Plan for the Dairy Industry" report, carried out by Prospectus Promar in 2003, said many existing plants had to close.

In its letter, the Mitchelstown-based Dairygold co-operative "urgently" requested the EPA to change the regime before it comes into force in seven weeks time. It said: "The EPA's National Allocation Plan confirms that sites which close will lose their allowances and the Exchequer will benefit from the sales revenue."

Dairygold's chief engineer Mr Dermot Kelleher told the EPA that the agency's current plan "is a disincentive for companies" to consolidate operations in more efficient factories. The EPA's ban on transferring emission licences inevitably means that milk processing plants that survive the industry's rationalisation will face heavy bills.