11 October 2002 – The European Parliament gave its backing on Thursday to a plan that will limit the amount of “greenhouse gases” firms can emit and encourage them to buy and sell the right to pollute.

The policy is a cornerstone of the European Union’s strategy to reduce the gas emissions, blamed for trapping heat in the atmosphere, which it agreed to cut under the 1997 Kyoto treaty.

Environment Commissioner Margot Wallstrom called the action a “major step forward towards implementing the Kyoto protocol within the EU”.

Under the bill, from 2005 most heavy industries will be granted emissions permits by their governments, setting ceilings on their outputs. If they exceed a maximum emissions level, they will be allowed to buy extra credits from less polluting firms.

The bill will be discussed by EU environment ministers next week. EU governments have joint legislative powers on the issue with the European Parliament.

In a key amendment, Parliament voted to allow member states to let their industries opt out of the scheme until the end of 2007 — a change that would allow an existing, voluntary, emissions trading scheme in Britain to continue.

Such an opt out would only be allowed if member states could make the same emissions cuts as they would under the EU scheme.

Britain launched its trading system this year, offering financial incentives for firms that volunteered to take part.

Parliament said the scheme should include all six greenhouse gases covered under Kyoto, rather than restricting it to the main one, carbon dioxide, as proposed by the Commission.