In a bid to get industry to focus on fuel scarcity as well as greenhouse emissions, Brussels is supporting levies on all forms of energy, even including those that add no carbon pollution to the atmosphere such as wind, solar or hydro-power. The idea is to send a "price signal" on all kinds of externalities . . . not just greenhouse gases. Theoretically, such a tax would take account of the visual impact of windmills as well as more obvious costs, like nuclear waste storage and treatment.

The commission's consultative green paper on the subject does not specify how each form of energy should be taxed, but suggests taxing all fuels according to their energy content, which would put renewable biofuels on a similar footing to more carbon-intensive coal and peat.

Sue Scott, head of the ESRI's environmental policy research centre, gave a qualified welcome to the proposals, saying that while broad energy taxes do take account of the external costs inherent in all energy production, they should be targetted very specifically.

"It's a way of provoking discussion on the real costs of energy consumption, " she said. "But I would like it more firmly based on the damage costs of each fuel . . . it should be individually more specific."

Ibec environment spokesman, Donal Buckley, expressed concerns about any energy content tax that wasn't focused .

"It's hard to understand taxing renewables, " he said. "But what matters is the differential between different types of energy . . . the idea is to send the right signal on emissions."

The green paper also expresses a preference for ultimately replacing the current emissions cap-and-trade system in favour of a tax regime which would send stronger price signals while also generating more exchequer revenue.