The Government's allocation of free carbon credits to industry has been described as "the ultimate stealth tax" by Friends of the Earth (FoE), which claims it will cost taxpayers at least €2 million per week.
The Environmental Protection Agency (EPA), which published the latest national allocation plan last Friday, estimates that Ireland's greenhouse gas emissions from 2008 to 2012 will be double what is allowed under the Kyoto Protocol.
Every tonne of this overshoot of seven million tonnes a year on average will have to be offset by an emissions permit.
Assuming carbon dioxide (CO2) prices remain steady at around €15 a tonne, the total cost to Ireland would be €105 million a year.
Commenting on the likely bill, FoE director Oisín Coghlan said: "This is the ultimate stealth tax. The Government has replaced the polluter-pays principle with the public-pays principle".
If CO2 prices rose again to €30 per tonne, the cost would "skyrocket" to over €1 billion.
"Industry will get their pollution permits for free, but raise consumer prices to reflect their value.
"On the other hand, the Government will use taxpayers' money to buy permits for the rest of our Kyoto overshoot. It's a double whammy for the average household."
Mr Coghlan said it was not too late to turn "this topsy-turvy situation" around.
"The Government could and should be auctioning 10 per cent of the industry permits, instead of giving 99.5 per cent of them away for free as windfall gains to polluters."
He also called for the introduction of a carbon charge in the rest of the economy not covered by the emissions trading scheme.
"That way businesses and consumers are directly encouraged to cut emissions and only pay their fair share according to how much they pollute."
