The State's biggest industries will not actually have to cut existing levels of carbon dioxide emissions under Kyoto Treaty targets set out last night by the Minister for the Environment, Mr Cullen.
Under the three-year pilot programme to run from 2005 to 2007, the 100 biggest Irish companies will be able to produce 22.5 million tonnes of CO2 without suffering penalty - 0.2m tonnes more than they do currently.
Major companies, including the ESB, Cement Roadstone and Aughinish Alumina, are affected by the decision.
Faced with strong pressure from major industries, the Minister has ruled that the companies should get licences to cover "an estimated 96 per cent to 98 per cent" of their expected emissions between 2005 and 2007.
Pleasantly surprised by the decision last night, one industry figure who has closely watched the preparation of the decision told The Irish Times: "It's business as usual."
The issue has led to some reported tensions between the Minister for the Environment and the Tánaiste and Minister for Enterprise, Trade and Employment, Ms Harney, who strongly pushed industry's case.
The Industrial Development Authority welcomed the move. "We have enough issues at the moment affecting our competitiveness without creating any more of them," its spokesman, Mr Colm Donlon, said.
The Environmental Protection Agency is now to divide the emission allowances between the 100 firms, though Mr Cullen said there will have to be "a necessary balance" between environmental needs and "continued economic growth".
"I will, in transmitting the Government's decision to the EPA, be placing a high emphasis on the need to protect the competitiveness of sectors exposed to global competition," the Minister said in a statement.
Industry is currently responsible for producing one-third of all of the Republic's emissions of carbon dioxide - the principal gas responsible for global warming.
The decision not to impose cuts on industry raises the possibility that individual consumers could end up paying significant carbon taxes once they are introduced in the 2005 Budget if national CO2 emissions continue to rise.
However, industry will still face heavy costs to halt the rise in its production of CO2, since Irish industry is unlikely to be allowed to produce more than 22 million tonnes a year between 2008 and 2012.
The Minister's decision was eased by the closure of Irish Steel, Irish Fertiliser Industries and Irish Glass Bottle - which together produced 10 per cent of all industrial CO2 emissions.
Under emissions trading, companies are encouraged to cut their production of CO2 below their licence limits, since they can then sell on spare capacity.
