Details of how industry will be expected to reduce carbon emissions in the face of climate change have been announced by Defra. The National Allocation Plan (NAP) focuses on the biggest carbon emitters and more carbon emissions will be covered under the scheme.

Still to be approved by the European Commission, the plan outlines the size of carbon allowances to be allocated to individual installations. The Government announced in June that the second phase of the EU Emissions Trading Scheme will deliver additional savings of 8 million tonnes of carbon each year from 2008-2012.

The second phase of the EU ETS will be expanded to cover additional activities at 160 installations, responsible for 9.5 million tonnes of carbon dioxide that are not covered in the current phase of the scheme.

The NAP also provides measures for the smallest emitters to be removed from the scheme. Installations such as hospitals, universities and the smallest industrial emitters within the scheme emit little carbon but face a disproportionate burden to comply with the scheme.

“Government, businesses and individuals all have a responsibility to work together to reduce carbon emissions and our impact on the climate,” said Environment and Climate Change Minister Ian Pearson. “This is vital if we are to avoid dangerous climate change.

“Our plans for the second phase of the ETS expands its coverage and will result in more carbon emissions being monitored. We are focusing on the biggest carbon emitters whilst removing those businesses where the costs of the scheme outweigh the environmental benefits.

“Emissions trading is about providing business with a cost effective way of reducing emissions.

“The ETS provides business with the flexibility and a choice as to how to tackle carbon emissions. Industries can make a business decision whether to reduce emissions or to buy reductions from elsewhere.”

Department of Trade and Industry Minister Malcolm Wicks added his thoughts on the scheme. “The announcement provides further certainty for business as it sets the emissions allocations up until 2012. UK business is playing its part in reducing carbon emissions and in developing this plan we have taken account of competitiveness implications.

“We have sought to improve and simplify the rules of the scheme building on our experience of Phase I.”