The EU scheme has taken a beating in recent weeks with carbon prices diving after data showed most companies used fewer CO2 permits in 2005 than they were given by their governments.

"We are not worried about developments in markets regarding trade in (CO2) certificates. After a year, it's too early to say anything about that," Proell, whose country currently holds the presidency of the 25-nation EU, said.

He said one minister had pointed out in the meeting that the US sulphur market had also experienced big fluctuations.

The EU emissions trading scheme came into force in 2005. It sets a limit on the amount of CO2, the main gas blamed for global warming, that energy-intensive industries can emit.

Companies that overshoot their target must buy permits on the market, while those that undershoot can sell their extra certificates.

EU Environment Commissioner Stavros Dimas said on Friday that EU states had allocated too many CO2 permits to their industries in 2005.

On Saturday, he said ministers had agreed that scarcity was crucial for the system to work.

"It was stressed by member states very clearly that scarcity is essential for the functioning of the system," Dimas told reporters after the ministers' meeting.

EU states must submit their CO2 allocation plans for the 2008-2012 trading period to the executive European Commission by June 30.

Dimas said he expected them to hand over the plans on time.

Environmentalists want the states to allocate fewer CO2 permits to their industries, creating more of an incentive to cut pollution.

Dimas said he would be "tough but fair" when judging the plans, according to his spokeswoman. The Commission has the power to approve or reject the plans.

Austria's Proell said he supported the current deadline.

"We need to stick to the timetable," Proell said, rejecting arguments by some member states that they needed more time to prepare the next round of plans.

He said EU countries were learning from the 2005-2007 first round of national allocation plans.

"Naturally some things have gone wrong but I'm very optimistic that it's going to be successful," he added.

Dimas said the ministers had also discussed the possibility of longer trading periods from 2013, the inclusion of other greenhouse gases and installations in the trading scheme, and harmonising allocation rules among EU countries.

Proell said the ministers had talked about fairness and equal treatment in the scheme.

The Commission will review the scheme later this year to look at possible changes.