Bank of Ireland has moved to cash in on the emissions trading system set up following the Kyoto Protocol. It is the first Irish bank to move into the area.

The bank's subsidiary, Bank of Ireland Global Markets, is offering a new service to carbon-producing firms. These companies are allowed to trade carbon emissions under a system established as part of the protocol.

Companies producing too much carbon need to purchase new carbon credits, while those producing less than expected can sell or exchange their credits. The credits are given to firms as part of national allocation plan.

Carbon credits are sold, bought or exchanged under an EU Emissions Trading Scheme (EUETS). Bank of Ireland said that carbon emissions trading was tipped to become "a market of increasing importance".

It is estimated that 106 Irish companies will take part in emissions trading. The Environmental Protection Agency is setting up a registry of the companies, which should go live at this summer.

According to Mick Sweeney, Bank of Ireland Global Markets chief executive, around 11,000 firms in the EU have to ensure that they have sufficient emission allowances to meet their obligations under the scheme.

"In the first three months of 2005, approximately 60 million tonnes of carbon dioxide have been traded. When one considers that it is estimated that only 10 million tonnes of carbon dioxide changed hands in the two years prior to the official EUETS launch in January, the explosive growth of the market is self-evident."