Mars fined for breaching rules on carbon trading

The food giant Mars was fined yesterday by the Environment Agency for breaches of European carbon trading rules, introduced to combat global warming.

Mars (UK) was one of four companies handed penalties totalling more than €1m (£750,000) after it failed to submit permits for the amount of carbon it emitted in 2005, the first year of the scheme. The Peterborough-based company, Britain's biggest food manufacturer with sales of more than £2bn a year, was fined €78,000 for failing to obtain allowances for some 2,000 tonnes of carbon it produced.

These are the first fines handed down under the new rules. Announcing the penalties, Barbara Young, the chief executive of the EA, stressed the importance of the scheme to combating greenhouse gases and said it was "vital everyone plays by the rules".

The other three companies to be fined were Alphasteel, a steel recycling business in Newport, South Wales, which was handed a £565,000 fine for failing to submit any allowances, Daniel Platt, a ceramic tile company from Stoke-on-Trent, which was fined £122,000, and ScandStick, a Cambridgeshire-based adhesive products manufacturer, which was fined just under £20,000.

Under the EU scheme, companies are given set allowances for the amount of carbon they can emit. If they exceed their allowance, they must buy additional permits from other companies to cover the excess.

News of the fines came as it emerged that the Government plans to extend the scheme to a wider range of UK companies. At present, only larger polluters are covered. Under the new plans, as many as 5,000 businesses, including banks and universities, could be brought into the scheme.

In 2005, the UK was allocated permits allowing it to emit a total of 215 million tonnes of carbon. The actual emissions by companies covered under the scheme was 242.5 million tonnes, requiring them to buy 27 million tonnes on the carbon emissions trading market. Companies had until 30 April this year to submit their permits for 2005. The EA said 99 per cent of the 535 companies covered by the scheme had met their obligations in the first year. Under the EU directive, companies which fail to account for their carbon emissions are fined €40 a tonne.

Mars (UK) produced 1,952 tonnes of carbon. It did not submit permits to cover these emissions until nearly eight months after the deadline, said an EA spokesman.

Brussels has just issued new carbon permits for the next phase of the scheme from 2008-2012. Britain is alone among the 10 nations which have submitted plans in having its allocation approved.

A spokesman for MasterFoods, the name under which Mars (UK) operates, said: "MasterFoods... has not been discharging excess greenhouse gases into the atmosphere, and in fact its emissions at the Peterborough facility have reduced."