Under the scheme, the Department for Environment, Food and Rural Affairs will set a cap on the amount of carbon dioxide that can be emitted from businesses in the first phase, from 2005-2007.
Individual businesses will be awarded a portion of this allowance or cap, which can then be traded. Companies achieving greater energy efficiency can then sell their surplus allowances of CO2 to others that find it more expensive to reduce theirs.
David Gillett, head of environment at The Confederation of Paper Industries (CPI), was concerned that confusion could arise if companies were dealing with both the Climate Change Levy (CCL) and emissions trading scheme, so the CPI is running workshops to aid its members.
He was also concerned that the emissions trading scheme should not conflict or interfere with any benefits gained by businesses under the CCL.
A spokeswoman for The Environment Agency said the scheme would initially cover emissions of CO2 only, but there was scope to expand the directive to cover other activities and gases.
Progress on emissions
Companies have until 31 January 2004 to register for a trading permit from the Environment Agency
When the trading scheme starts on 1 January 2005, it will cover more than 40% of European CO2 emissions
Under the Kyoto agreement, the UK has agreed to reduce emissions by 12.5% from 1990 levels by 2008-2012, and a domestic target of a 20% reduction of CO2 emissions by 2010
Story by Andy Scott
