Under the trading scheme, firms receive a year's supply of carbon credits for their 'active' facilities, regardless of what length of time they were actually operating for.

In Greencore's case, it is understood that it obtained full credits for Carlow in 2005 and Mallow in 2006 because both processed a small amount of sugar at the start of those years before being closed by the company.

This meant that the firm now has a surplus of credits, which it can sell for profit on the open market to other firms.

It could also allocate them to its other operations to reduce its need for carbon credits in the future.

According to Oisin Coughlan, the director of Friends of the Earth in Ireland, the situation illustrated the flawed nature of the emissions-trading system.

He said that the credits had an average long-term value of around Euro15 each. "I don't see why a company that takes a decision to shut a business on non-environmental grounds should make windfall profits because it didn't use all its carbon credits, " said Coughlan.

He said that, instead of the state giving away the majority of its annual carbon credits at the start of each year, as is currently the case, companies should have to bid for all their credits on the open market.

But Patrick Coveney, Greencore's chief financial officer, said that the amount of credits involved was "modest" and that the potential gain to Greencore was less than Euro200,000.

"In the context of the exit costs from sugar of over Euro100m, it's a very modest figure, " he said. "In both cases, we would not have known at the start of each year that we were going to shut down the plants."

Coveney said that Greencore had redistributed some of the credits within its business and intended to sell the remainder "at a nominal value". He admitted, however, that the firm had opted not to sell the credits last summer because of a sharp fall in the value of the credits caused by mild weather.

An EPA spokesman said that it couldn't take back the remainder of a firm's carbon credits for the year when it closed a plant as this was against the rules of the EU scheme.

"The point is that carbon trading is designed to reward non-emissions.

We're not actually trying to trade - it's simply a means to an end. So, if you decide not to emit, you have a windfall gain."

Rank Firm Industry Total over % over [tonnes of CO2] 1ESB Energy 10.2 2 Edenderry Power Energy 232,984 37.1 3 Synergen Energy 01,383 21.6 4 Quinn Cement Cons materials 148,271 16.9 5 Viridian Energy 91 8.9