For chemicals companies doing business in Europe, the highest-profile environmental issue of recent years has been the Reach directive. But companies are also fixing their attention on another issue giving rise to regualation: climate change.

The European Union's flagship climate change policy is about reducing emissions from energy-intensive businesses, which are responsible for almost half of all carbon dioxide emissions, through a system of carbon trading. Under the EU's emissions trading scheme, such businesses are given a quota for the amount of carbon dioxide they may produce in a year. Those that need to emit more than their quota must buy emissions allowances from businesses with spare capacity. Allowances for the second phase of the scheme, which will run from 2008 to 2012, are changing hands for about €19 per tonne.