UK - Government in drive to cut CO2 emissions

The UK has a national goal of a 20 percent reduction in CO2 emissions by 2010, tougher than the target set by the international Kyoto protocol on climate change.

Analysts say the plan will hurt coal-fired power producers but will provide a boost for low-carbon generators relying on gas, nuclear, hydropower and renewables.

\"The big winners are the low carbon (emitting) generators. Scottish and Southern Energy will do well. Coal generators will do less well,\" said Andrew Wright, utilities analyst at investment bank UBS.

UK power prices have rallied recently in anticipation the emissions targets will force coal generators to curb their output.

All EU countries must submit proposals to Brussels by March on how they will meet Kyoto targets and approved plans will come into effect in 2005.

The 16.3 percent cut in the UK\'s emissions is for the first three-year phase of the EU scheme running from 2005 to 2007.

The curbs on emissions in the second phase of the scheme, from 2008 to 2012, will be tightened to achieve the UK\'s 20 percent target by 2010.

\"The allocation of emission allowances has been set at a challenging but achievable level which will encourage industry to invest in emission abatement and take advantage of the opportunities that trading has to offer,\" Margaret Beckett, Secretary of State for the Department for Environment, Food and Rural Affairs, said in a statement yesterday.