In addition, it is hoped the scheme would improve economic efficiency and ensure industry's contribution to the UK target under the Kyoto Protocol. Under the proposed scheme, all UK firms would be eligible to participate, though participation would be voluntary.
Firms can participate in three ways.
Firms agreeing to an annual greenhouse gas emissions limit would be granted permits to match that limit. Finally, firms investing in projects to reduce GHG emissions would receive credits for those reductions that could be sold in the market. Permits not needed to meet a firm's target in a given year could be banked for use in future years. However, the amount of banked permits that could be used during the Kyoto commitment period of 2008-2012 would be restricted. A copy of the proposal is available here .