The European Commission has rejected Malta's claim for an annual allocation of 2.9 million tonnes of greenhouse gas emissions between 2008 and 2012, reducing the amount by 30 per cent and capping emissions at 2.1 million tonnes a year.

The decision came after an analysis of the draft National Allocation Plan (NAP) sent to Brussels last September as part of Malta's obligation under the emissions trading directive.

In its draft report, compiled by the Malta Environment and Planning Authority with the help of Envirno-Markets International, a British consultancy firm, Malta asked for an annual allocation of 2.96 million tonnes.

However, the Commission found this to be excessive, saying it does not respect the directive's rules.

Only two installations, Enemalta's power generating plants in Delimara and Marsa, currently fall under the remit of the EU's Emissions Trading Scheme.

According to unpublished figures, last year the two power stations generated 1.98 million tonnes of carbon dioxide, about seven tonnes per capita.

The government's claim for a bigger allocation of emissions was primarily based on the assumption of an increase in energy demand in the coming years due to an increase in economic activity. It also included a "reserve allocation" in case of a new entrant in the market, such as a new installation.

Malta was not the only EU member state ordered to revise its emissions allocation plan - all 10 plans considered by the Commission so far have been amended, with emissions allowances reduced below proposals.

The aim of the EU emissions trading scheme is to ensure that greenhouse gas emissions from the energy and industry sectors covered are cut at the least cost to the economy, thus helping the EU and its member states to meet their emission commitments under the Kyoto protocol.