The amount of greenhouse gas pumped into European skies rose by up to 30 million tonnes last year despite the EU’s pledge to lead the world in tackling climate change.

A much-heralded emissions trading scheme, which is being copied by California and is seen as the market solution to reducing harmful gases, failed to achieve the cuts in industrial pollution needed to hit Kyoto targets, figures from the European Commission showed.

The Europe-wide increase in CO2 came in the second year of the scheme to allocate emission permits to companies and power generators. Critics described the EU trading system as “botched central planning” because too many permits were granted, enabling polluters to buy them at knockdown prices and carry on producing the gases that cause climate change.

Figures published yesterday for industrial emissions in 18 of the 27 EU countries, showed that European companies and power generators produced 1.79 billion tonnes of greenhouse gas last year. They came less than a month after the EU vowed to set an example to the world by making at a cuts of at least a 20 per cent in greenhouse gases by 2020.

Emissions trading has been hailed as the market solution for cutting harmful gases by making the permission to pollute an increasingly scarce commodity. But officials from the European Commission admit that too many permits were issued in the first phase of the scheme, from 2005 to this year.

They said yesterday that there would be deep cuts in national allocation plans for 2008-12, with Slovakia cut by 50 per cent and Poland by 26 per cent.

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