Midlands industry voiced concern last night as Britain agreed to cut by nearly three per cent its carbon emissions quota.
The move affects the next round of Europe's carbon trading scheme but the UK will still miss its self-imposed targets to reduce pollution.
The carbon market is the European Union's main strategy for curbing greenhouse gas emissions.
The new British permits quota for the 2008-2012 second phase is 12.5 per cent below the 2005 emissions of heat-trapping carbon dioxide, and is at the top end of a range the Government consulted on in March.
"The plan delivers on our environmental considerations consistent with our economic considerations," Environment Secretary David Miliband (pictured) said.
Environmentalists promptly rejected the cuts as too shallow, while industry complained they were too deep.
The annual quota of emissions permits in the second phase would be cut to 238 million tonnes of CO2, from 245 million tonnes in 2005-07.
All EU states must submit by June 30 their permit quotas for the second round of the market from 2008-12, but the European Commission can reject these if deemed too lax.
On current efforts Britain would only manage to slash its carbon emissions by 16.2 per cent from 1990 levels by 2010, well short of its self-imposed target of a 20 per cent cut.
But the CBI said that while industry would do its bit in the battle against global warming, the scale of proposed carbon cuts was economically damaging.