EU gives amber light to UK emission trading

State aid clearance granted alongside warning of incompatibility with planned EU scheme

The European Commission today cleared Britain's industrial greenhouse gas emission trading scheme to launch in April, while warning that London must align its rules with an EU scheme meant to start in 2005. There were "substantial differences" between the British and European plans, the Commission said, which might lead to unacceptable market distortions in the future.

The pioneering UK scheme will involve nearly 50 industry sectors and is the most comprehensive initiative of its type anywhere in the world. It is designed to enable "learning by doing" ahead of introduction of an EU-wide scheme and then full global trading under the Kyoto protocol from 2008.

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