Minister for the Environment Dick Roche has said that the cost of exceeding the Kyoto targets on carbon emissions has been reduced. However, the State will still face a bill in the region of €1 billion, with the taxpayer paying a little over half and the rest being picked up by the business sector.
Mr Roche was accused last night by industry of penalising business and shirking the challenge of a national burden-sharing scheme which could have a real impact on reducing carbon emissions.
At a Cabinet meeting yesterday, Mr Roche said that the excess target for Kyoto compliance between 2008 and 2012 had been reduced from 9.2 million tonnes a year to 7.2 million tonnes and he was given approval for a scheme of levying charges on the trading sector.
This sector, which includes big users of energy involved in electricity generation and large industry, will have to meet the cost for three million tonnes of emissions which will come to at least €400 million over five years.
No plans were announced for charging the rest of the economy including agriculture and the transport sector, which generates the other four million tonnes. Instead, the State will purchase carbon credits at a cost of more than €500 million. "The EU Emissions Trading Scheme, already operating successfully on a pilot basis, will make a significant contribution in helping Ireland meet its Kyoto target," Mr Roche said.
"The Government's decision means that just over 23 million C02 allowances will be made available to the trading sector for the 2008-2012 period. Emissions trading has proved it can work and Irish industry has enthusiastically embraced it as a flexible way to control and reduce greenhouse gas emissions."
Mr Roche added that the improvement in the distance to target had enabled the Government to allocate an extra one million allowances per annum to the emissions trading sector.
"The 23 million allowances will be allocated by the EPA to the individual installations within the framework of a National Allocation Plan which will now be prepared by the EPA."
Member states are required to submit their plans to the European Commission by the end of June.
Irish emissions for 2004 were about 23 per cent above 1990 levels. About a third of total national emissions occur in the emissions trading sector.
Over the 2008-2012 period, Ireland must restrict its emissions to 1990 levels plus 13 per cent, which is equivalent to 63.032 million tonnes of carbon dioxide per annum.