Pollution targets may undermine coal offer

Eastern Group, the UK's fourth-largest power generator, could be forced to cut short a consumer offer aimed at boosting the market for British Coal if the Environment Agency pushes ahead with tough new pollution targets.

The generator will mount a savage attack on the pollution proposals in submissions to the agency, claiming it would have to import almost all its coal from abroad to meet the new obligations.

Jim Whelan, managing director of Eastern's generation business, described the targets as "absolute rubbish". He said: "This can't be consistent with the Government's drive to help the coal industry."

Under Eastern's offer, called Lionheart, it would buy 1.5 tonnes of extra British coal for every new customer it signs up when the domestic electricity market opens to competition later this year. But Mr Whelan said Eastern could only offer Lionheart for a very short time if the agency implemented the targets. "There's clearly a lack of joined-up thinking here. We can't buy coal if we can't burn it."

The targets would bring forward a planned cut in sulphur emissions from 2005 to 2001. The agency said generators could meet the obligation by burning British coal with an average sulphur content of less than 1.2 per cent. But Eastern said coal from RJB Mining, the largest producer, had an average sulphur content of 1.6 per cent.