Irish industry's biggest emitters of greenhouse gases could be faced with a bill in the region of €70 million if they fail to reduce their emissions from this year onwards.
The Environmental Protection Agency (EPA) today released the State's final plan for distributing credits allocated under the Kyoto Protocol which allow countries emit a specified amount of climate-threatening gases without cost.
Thereafter credits must be paid for on the international carbon trading market. Current prices range around €20- €24 per tonne.
The total quantity of allowances to be allocated to heavy industry over the next five years is 87 per cent of forecasted emissions. Companies will be responsible for making up the shortfall by either purchasing credits or reducing their emissions.
The final cost of credits will be established by around 2012 when the Kyoto targets expire. Today's EPA plan has allocated 22.281 million of Ireland's allowance to heavy industry from this year onwards. Each allowance equals one tonne.
Over 100 sites are covered by the plan with power generation receiving two thirds of the allowances.
The cement and lime production sectors top the list of other recipients with glass and ceramic plants, oil refineries, and larger companies in sectors such as food and drink, pharmaceuticals and semi-conductors.
A regime appraoved by the European Commission to exclude certain smaller installations from the scheme will be implemented in line that agreed in other member states.
Some 9 per cent of the allowances are reserved for future allocation while 0.5 per cent has been set aside to pay for the administration of the scheme.
Ireland is around 8.5 per cent off its target under the Kyoto Protocol which requires average annual emissions to be 62.84 million tonnes - or 13 per cent increase above 1990 levels. The Government estimated that around €270 million will be needed to pay for carbon credits to meet our Kyoto obligations.
Director general of the EPA Dr Mary Kelly said the National Allocation Plan paid particular attention to the role of renewables in electricity generation.
"In addition, the EPA has increased the dedicated set-aside of emissions allowances designed to promote Combined Heat and Power (CHP) facilities," Dr Kelly said.
Unlike conventional power stations CHPs tap the heat created in electricity generation and distribute it locally.
Today's final plan is a revised version after the European Commission sought amendments to the original submitted in late 2006. It was approved by the Commission last month.