The Government will not contest an order by the European Commission to cut the amount of CO2 Irish industry can emit between 2008-2012.
The deadline for an appeal to the European Court of Justice (ECJ) is Monday, however the Government confirmed yesterday it would not challenge the proposed 6.4 per cent cut in CO2 allowances in court.
"We are still engaged in discussions with the commission on our national allocation plan for Co2 and are seeking some modifications to the commission order, but we will not go to court," said a spokesman for Minister for the Environment Dick Roche.
Europe's biggest polluter, Germany, also announced it would not challenge a cap set by the commission for greenhouse gases emissions aimed at tackling climate change.
Berlin had considered an appeal against a proposed 6 per cent cut in the level of allowances it can provide to its companies to produce CO2. But it backed down yesterday, declaring it was fully behind the campaign for "climate protection".
The German government had been under intense pressure not to appeal the commission's order after placing climate change at the top of its agenda for its six- month presidency of the EU.
Most analysts predicted a rash of court appeals from other smaller member states if Berlin had challenged the commission's decision.
Slovakia has already announced that it will mount a legal challenge to the ECJ and at least eight other member states will have to declare their intentions by Monday.
In a tough series of decisions announced last December, the commission announced a series of cuts in nine member states' national allocation plans (NAP) for CO2 for 2008-2012.
In the previous allocation round, EU states gave too many carbon allowances to firms, causing the price of CO2 allowances to slump and damaging the emissions trading system's credibility.
In December the commission ruled that Ireland must reduce the level of allowances that industry receives to produce greenhouse gases by 6.4 per cent between 2008 and 2012. It has also set tough limits on the amount of carbon credits industry can purchase from the developing world to meet its obligations under the Kyoto Protocol.
The Government is understood to have sought a lower cut in this headline figure in negotiations with the commission last month. The commission is studying the Government's revised plan and is expected to decide shortly on a final figure.
Prospects do not look good. The commission has not agreed to reduce the proposed headline cut in Germany's allowance plan despite intense lobbying from Berlin in recent weeks.
Ibec has blamed the Government for the proposed commission cuts in Ireland's CO2 allowances. It said it did not submit a NAP plan underpinned by an updated national climate change strategy.