Irish industry will be allowed to emit 115 million tonnes of carbon dioxide between 2008 and 2012 before facing fines, under the State's new carbon emissions trading regulation were published today.
The Environmental Protection Agency (EPA) published its draft of Ireland's second National Allocation Plan for Emissions Trading in Ireland. About a third of Ireland's total emissions occur in the emissions trading sector. The bulk of the remainder comes from agriculture and transport.
The allocations are based on the historical production of CO2 - the main cause of climate change - by companies over recent years. Around although five per cent of the total will be kept for new firms not already covered by the scheme.
The EPA is to offer special treatment for highly efficient combined heat and power plants, and to encourage the development of renewable energy supplies.
The total allocation of allowances is 115.07 million tonnes for each of the five years from 2008. Over 94 per cent of these allowances will be allocated free to existing industrial CO2 producers.
The European Commission's Emissions Trading Directive requires European Union member states to impose a cap on companies on the amount of C02 that they are allowed to emit each year.
Those exceeding this limit have to either curb their emissions or pay for allowances to meet their needs. Businesses not using their full allocation are allowed to trade their excess.Companies must pay a penalty of €100 per tonne for non-compliance with the rules.
Businesses such as power generating plants, cement factories, oil refineries and lime, glass and ceramics manufacturers fall under the scheme. Others include food and drink producers, pharmaceutical plants and electronics businesses.
A public consultation process on the draft plan begins today and ends on June 12 th. The draft is scheduled to be sent to the European Commission by June 30 th.
The Kyoto protocol, which was signed in 1998, set legally binding limits for greenhouse gases, mainly carbon dioxide and methane. Ireland was limited to greenhouse gas emissions of 13 per cent above 1990 levels, or just over 63 million tonnes a year, between 2008 and 2012.
Irish companies will have to buy credits to cover the excess if the target is not achieved. Irish emissions for 2004 were about 23 per cent above 1990 levels.
Minister for the Environment Dick Roche has accepted this target will not be met, but insisted that the cost of exceeding the limit has been reduced.
He said in March that Ireland's excess target for Kyoto compliance between 2008 and 2012 had been reduced from 9.2 million tonnes a year to 7.2 million tonnes.
The excess will cost up to €1 billion per year, which will be met by taxpayers and the business sector.
The Green Party today called on the Government to take tougher action on the country's main polluters in order to meet the Kyoto protocol.
Environment spokesman Ciaran Cuffe said the were not enough incentives in place to encourage Irish businesses to reduce emissions. "Ireland is still third last out of twenty-three European countries in meeting our targets under Kyoto. However we're still building motorways and urban sprawl as if climate change doesn't exist, and as if the oil will last forever."
