The government places much of the blame on growth in the steel, petrochemical and energy industries, which account for around 80 percent of the island's CO2 emissions.

Taiwan's emissions of the greenhouse gas amounted to 270 million tonnes in 2004, putting it at 22 in the world in terms of volume and accounting for around 1 percent of total global emissions, the economics ministry said.

The Minister of Economic Affairs Ho Mei-yueh said Taiwan hoped to cut that by 170 million tonnes by 2025.

"On the one hand, we must maintain economic growth, on the other we must cut the overall emissions to create a win-win situation for both the domestic economy and the environment," Ho said at the opening of the National Energy Conference.

If the government did nothing to reduce the gases, Ho said, the island's annual emissions could top 530 million tonnes.

The meeting of government officials, industry executives and academics aims to forge a consensus on how exactly to achieve that goal and comes just after the 1997 Kyoto Protocol agreement, of which Taiwan was not a signatory, came into effect in February.

ELUSIVE TARGETS

In 1998, the government set emission reduction targets that have not been met since, despite moving towards greater reliance on far less polluting natural gas to generate electricity.

The government is suggesting imposing emissions cap and trade limits, whereby it would cap overall emissions and sell the rights to exceed those limits to companies that require it.

It is also promoting further developing renewable energy sources and tweaking the energy pricing system to encourage the use of less-polluting energy sources.

It is treading carefully as it considers the concerns of industry, which fears being hit with overly restrictive conditions, and increasingly vocal demands by residents on the island of 23 million people for a cleaner environment.

Key to both sides are how new emissions controls will affect two major projects slated for southern Taiwan that will see the construction of a petrochemical complex and steel refinery.

Chinese Petrochemical Corp. [CHIP.UL] plans to build a complex complete with a 300,000 barrel per day refinery and a naphtha cracker with an annual capacity of 1.2 million tonnes of ethylene.

The Formosa Plastics Group plans to build a 7.5 million tonne steel plant nearby.

But recent media reports have speculated that the projects may be put on hold as the government, which approved both plans earlier this year, awaits the outcome of the energy conference.

The government appeared to ease industry concerns at the conference, where a small group of residents and environmentalists staged a noisy protest at the front of the building, forcing senior government officials to enter by side doors.

"We don't want environmental protection to come at the expense of economic development," Vice Premier Wu-Rong-I said at the conference.