LONDON, Mar 13 (Reuters) - Energy-intensive businesses in Britain including supermarkets, banks and hotel chains will have to buy pollution permits from 2010 under a new government emissions trading scheme, Environment Secretary Hilary Benn said on Thursday.
The Carbon Reduction Commitment (CRC), which also includes all central government departments and local authorities, is a mandatory scheme that will help Britain cut greenhouse gas emissions by four million tonnes by 2020, the equivalent of taking one million cars off the road.
"The Government has to show it is serious about reducing CO2 emissions. This means the public sector improving the energy efficiency of its buildings - and doing this quickly," Benn said in a statement.
The CRC will be implemented under the UK's Climate Change Bill, currently going through Parliament.
Emissions trading sets and allocates a fixed quota of carbon credits, each allowing the bearer to pollute the equivalent of one tonne of carbon dioxide. Participants are then free to trade credits among themselves based on their individual energy demands.
The European Union initiated emissions trading in 2005 among its member states in an attempt to help them reach their goals under the U.N.'s Kyoto Protocol, which expires in 2012.
The EU scheme currently covers large installations including coal plants and cement factories, which make up half of the 27-nation bloc's total emissions.
The CRC will target smaller businesses and public sector organisations that do not qualify for the EU trading scheme, but whose annual half-hourly metered electricity use is above 6,000 megawatt hours.
The roughly 5,000 entities that fall into this category account for around 10 percent of the UK economy's total carbon dioxide emissions.
Britain's emissions in 2006, the latest figures available, were 652.3 million tonnes of CO2, already well within its Kyoto target of a 12.5 percent reduction of 1990 levels. But Britain has also committed to a further EU-wide goal to reduce 1990 levels by 20 percent by 2020.
"It won't be easy for all organisations...to cut their emissions quickly even though they'll be saving taxpayers' money in the long run by reducing energy bills," Benn said.
The UK government also announced 30 million pounds ($61.07 million) in interest-free loans for energy efficiency projects that will help businesses cut their energy use.
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