Irish industry faces swingeing cuts in the amount of carbon dioxide it can emit between 2008- 2012, under a European Commission plan to be discussed today.
European environmental commissioner Stavros Dimas will tell Minister for the Environment Dick Roche at a meeting in Dublin that he is proposing a reduction of 2.2 million tonnes in the annual allowance for firms in the emissions trading system.
The proposed reduction would reduce the average annual CO2 allowance for firms in the system to 20.1 million tonnes, down from the current level of 22.3 million tonnes.
Ibec warned yesterday that this proposed lower allowance would force some of the 100 Irish firms in the emissions trading scheme to spend up to €300 million on CO2 credits over five years.
"The suggestion from the commissioner for a further cut to an indicative allocation which is already insufficient is simply unacceptable," said Ibec's Donal Buckley, who said the State and other industry sectors needed to shoulder more of the burden.
The emissions trading scheme sets limits on how much CO2 can be emitted by high-polluting firms such as power stations, cement factories and manufacturers. Under the scheme companies must buy and sell rights to pollute, based on greenhouse gas emission limits negotiated and agreed by the Irish Government and the commission.
The cut in the allowance is proposed because the Government has failed to curb emissions of CO2 since 2005 and may breach the 2012 limit set in the Kyoto Protocol. The Government is due to agree a new plan for reducing CO2 emissions with the commission shortly.
CO2 is the main greenhouse gas blamed for global warming.
Under the Kyoto Protocol, Ireland has a target of capping the rise in its emissions at 13 per cent of their 1990 levels by 2012. Emissions in 2004 were 23.5 per cent higher than in 1990.
On the eve of a two-day trip to the Republic, Mr Dimas said measures were needed to reduce the emissions of greenhouse gases in the Republic.
"I hope Ireland will contribute to the debate on climate change," said Mr Dimas, who also plans to raise issues such as the nitrates directive, landfills and incinerators with Mr Roche and Minister for Marine and Natural Resources Noel Dempsey.
In a briefing with The Irish Times, Mr Dimas said climate change was top of the commission's agenda.
"If there is a real threat to the world, then it is climate change," he said. "Certain areas of Europe will face big problems from the melting of the ice caps. This will raise the water level and there is some evidence that is already slowing the gulf stream."
Mr Dimas also said he was considering extending the emissions-trading system to airlines and agriculture.