Eirtricity, the new wind-powered generating company, has started trading in "green credits", the first Irish company and one of the first in Europe to do so.

Waterford Crystal is its first customer, it was announced in Dublin yesterday. Eirtricity buys the power of six wind farms in the Donegal and Cavan areas and is building another three. Its generating plant, near Ballybofey in Co Donegal, will open within four weeks. Through a lease, it will feed into the national grid and will use the ESB's power lines to distribute its electricity.

After five months in operation, it has 3,500 small and medium-sized businesses as customers for its power. But it is the green trading operation which makes Eirtricity different from other small power generators. With the prospect of a carbon dioxide tax in sight throughout the EU within three or four years, companies like Waterford Crystal - in Ireland and abroad - will be able to buy green credits which they can offset against any taxes imposed on them, if they breach carbon dioxide limits.

Waterford Crystal produces its own power but is expected to use this agreement to buy options on green credits, useable when a price has been fixed. Prices are expected to differ in different countries.

The receipts from the green credits will be invested in non-fossil fuel power generation, so in the process, they will finance the development of non-polluting power generation systems, in Ireland in the case of Eirtricity.

Mr Eddie O'Connor, managing director of Eirtricity, said the price at which credits would be sold still had to be decided. It probably would be somewhere between 0.1p and 3p per kilowatt hour. "Because we're innovating on this one, it's very hard to say." He said Europe wanted to get non-dioxide power generation going and had set very ambitious targets. "Systems such as green credit trading and other types of emissions trading will allow industry the flexibility to meet emissions reduction targets as economically as possible," he said.