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CO 2 credits trade gears up to beat emissions levy

EIGHT MAJOR construction industry players are among the 34 firms set to start trading on the UK carbon emissions market next Tuesday.

Emissions trading is where companies can sell 'clean air credits' to other firms struggling to cut CO 2emissions. It is expected to catch on among the 6,000 UK firms that have signed climate change agreements obliging them to reduce emissions.

The UK has undertaken to cut production of CO 2by 12.5% against 1990 figures within the next decade.

Firms that do not achieve target will be subjected to a punitive climate change levy.

Under emissions trading, firms achieving greater than anticipated emissions savings will be able to sell clean air credits, while those struggling to cut CO 2can buy credits, so escaping the levy.

It is expected trading will kick off at just over £12/t of carbon dioxide bought or sold - considerably less than the levy.

It will at first be easy for most firms to reduce emissions through simple efficiency improvements, said a spokesman for consulting engineer Battle McCarthy, one of the firms signed up to the trading scheme.

But reducing CO 2further will become increasingly expensive, creating demand for clean air credits and pushing the trading price up.

Among the 34 pioneering traders are cement producer Blue Circle and major developers Land Securities, Lend Lease Real Estate Investment and Wates Group. They are joined by mining firm UK Coal Mining, energy generator First Hydro and Kirklees Metropolitan Council. Battle McCarthy is offering carbon trading to clients as part of its engineering services.

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