British installations covered by the trading scheme say their emissions for 2005-7 are now expected to be 56.1 million tonnes of carbon dioxidehigher than a projection made in April, the goverment said in a statement.

Because of this 7.6-percent increase in output, it will be more costly for British firms to meet a cap on pollution.

Britain therefore wants to increase its allowances for 2005-7 by 19.8 million tonnes to 756.1 million tonnes per year.

That amounts to increase of just under than three percent from the earlier projection, it added.

The Kyoto Protocol requires three dozen industrialized countries to reduce or stabilise their emissions of carbon dioxide (CO2) and five other greenhouse gases between 2008 and 2012 relative to their 1990 levels.

EU nations agreed overall to an eight-percent cut in emissions. The bloc is due to start the world's first full-fledged carbon market on January 1 to help meet that target.

Under it, governments set individual emissions targets for 12,000 plants that are big CO2 emitters, such as coal, and oil-fired power plants, pulp mills and cement and glass factories.

A total of 2.2 billion tonnes of CO2 will be traded this way.

For every tonne of CO2 that goes over their target, these plants are liable to a fine of 40 euros (50 dollars) per tonne during a three-year transitional period.

From 2008 to 2012, the punishment rises to 100 euros (125 dollars) per tonne of CO2.

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