As the 31 March deadline approaches for the EU's 15 member states to submit their national allocation plans (NAPs) required under Emissions Trading legislation to the European Commission, some Member States are beginning to put actual numbers on paper. In the political arena, two European Commissioners are at each other's throats, while at the negotiating tables there are still intensive discussions between government and industry and doubts are being raised on the overall economic effects of compliance with the Kyoto Agreement.

But there is little doubt that the pace set by the European Commission's tight timetable for implementation is beginning to tell. Of the 15 existing member states, only the UK met the December 31 deadline for putting the EU Directive on emissions trading into national legislation that from the beginning of next year will enforce caps on carbon dioxide emissions. The metals industry, along with power generators, cement and glass makers, is in the first tranche of businesses to be affected by the legislation.

Germany's Ministry of Environment has released a draft allocation plan that provides a set of principles to guide installation-level allocation. Industry immediately dismissed the plan, unhappy about treatment of new entrants, early action credit and the size of the total cap. While that may have been predictable, it is more surprising that the Economy Ministry, too, opposed the draft. Industry aside, it will be very hard for Germany to finish the NAP by this month's deadline with the two ministries involved not seeing eye to eye on key issues.

However, the European Commission is facing increasingly robust criticism of its Kyoto policies from within its own ranks and from the Spanish Government. The EC's Energy and Transport Commissioner, Loyola Palacio, has strongly questioned the economics of limiting carbon dioxide emissions, as has the government of José-Maria Aznar. Commission President Romano Prodi has attacked Ms Palacio for her stance and, more recently, Environment Commissioner Margot Wallström, said that the argument was “undermining policy”. However, unabashed, Ms Palacio has further developed her argument, and outraged green opinion, by saying that nuclear power was the way towards reducing greenhouse gases, rather than the Kyoto focus on emissions trading adopted by the Commission.

Spain is still in the early stages of NAP work, and is unlikely meet the March 31 deadline, not least because of mid-March elections. PricewaterhouseCoopers estimated last month that Spanish industry was likely to end up paying between e9 billion and e18 billion in fines over the first five-year phase of the Emissions Trading Scheme (ETS) as a result of failure to meet the EU's demands under the Kyoto accords. Each excess tonne of CO2 merits a e40 fine. An alternative scenario, said PwC, was that Spanish industry could be forced offshore.

While The Netherlands is expected to beat the NAP deadline, the Government has concerns that while the biggest companies have been preparing for the ETS for a long time, mid-size and small companies still have only a very vague idea of what the concept of emissions trading brings with it. It is staging regular conferences and seminars for the included industry. Last month they arranged one that drew more than 400 participants, illustrating the need for such service.

• In the UK Treasury officials have conceded to car manufacturers that plans to cut CO2 emissions by 20 per cent could cripple the automotive industry. There is also widespread acceptance that draconian cuts in CO2 emissions would hasten the decline in aging oil and gas fields in the UK sector of the North Sea. The United Kingdom Offshore Operators Association is to lobby the Government.