A new levy on profits earned by power plants on carbon credits, which the Government expects to raise €75 million, came into force yesterday.

Power plants do not have to pay for carbon credits, which allow them to emit greenhouse gases, until 2012, but the cost is still passed on to customers, earning a windfall for the generators’ owners.

The generators say they have been passing the gains back to customers in the shape of discounts, but the Government decided earlier this year to impose the tax.

It estimates that the measure will raise €75 million in one year and intends passing the cash back to large industrial users of electricity in a bid to protect jobs. The tax will only apply until 2012.