The main business lobby Ibec has warned that new limits on greenhouse gas production may impose major costs on Irish business and damage competitiveness.
However the Green Party and environmental groups criticised the limits announced yesterday as too generous, saying they were not stringent enough to allow the State to meet its international obligations to reduce greenhouse gas pollution.
The Environmental Protection Agency (EPA) yesterday allocated 115.07 million tonnes of greenhouse gas emissions to industry, cement manufacturers and power generators for the 2008-2012 period. These sectors produce a third of the State's greenhouse gases, with the remainder produced by domestic energy consumers and the transport and agriculture sectors.
The 115.07 million limit - 23 million tonnes per annum - was decided by the Government last month and it was the EPA's role to allocate it between 105 affected companies. Yesterday it produced a draft plan which will be finalised by the end of this year after a period of public consultation. The plan follows a pilot scheme that covered the 2004-2007 period.
According to Ken Macken, programme manager at the EPA, this new allocation allows industry use just 88 per cent of its needs in terms of emissions. If businesses produce more than their allocation they must either buy carbon credits on the international market or face fines of €100 for every extra tonne they use.
In contrast the last programme allowed for 96-97 per cent of industry's needs. "So there is a further belt-tightening," according to Mr Macken. "Ireland is still over its Kyoto target, but we expect to meet the target".
The Government signed up to the Kyoto Protocol in 1998. In Ireland's case, greenhouse gas emissions are limited to 13 per cent above 1990 levels, or just over 63 million tonnes a year between 2008 and 2012. It is currently 23 per cent above 1990 levels.
Mr Egan said power generation was taking more of the burden now, reflecting the wish to encourage the use of renewable energy sources. There are fears that with producers of greenhouse gases now facing limits to the amount of such gases they can produce without paying penalties or buying carbon credits, the increased costs to such industries may be passed on to consumers.
An Ibec spokesman said the total allocation to industry would leave all the affected companies short. "The Government has allocated 23 million tonnes per year and we think this is three to four million short. With carbon credits costing €10-€30 a tonne, it will cost the 105 companies involved €30-€90 million per annum." He said it was the Government that decided on the total allocation last month.
"What the EPA are doing now is apportioning the pain."
He said that while the 105 companies in the traded sector were having strict limits imposed, they only produced 33 per cent of the State's total emissions.
"However the rest of society, which accounts for the other two-thirds of emissions, has not had equivalent limits, caps or policies applied to them."
Environmental groups and some companies using cleaner technologies were unimpressed with the limits. Friends of the Earth likened the plan to "window-dressing while your house is on fire". The organisation's director, Oisín Coghlan,- said the plan covered only a third of Ireland's climate pollution, and excluded areas such as transport, where emissions have risen 143 per cent since 1990.
Ireland's only environmentally friendly cement manufacturer, Ecocem, said if the draft becomes the final plan it would immediately take High Court proceedings arguing that the scheme is being applied knowingly in a discriminatory way.
The company chairman, Donal O'Riain, said Ecocem is given no credit for its contribution to reducing carbon dioxide emissions by some 300,000 tonnes per annum. This may even put its future in jeopardy. Yet polluting cement producers were getting substantial subsidies.
Green Party spokesman Ciarán Cuffe called on the Government to tackle Ireland's main polluters in order to meet Kyoto targets.
"Carbon credits were allocated to existing bodies and this gives them a free licence to pollute. There just isn't enough incentive out there to reduce emissions."