A field trial by the UK organisation indicated the greatest carbon savings are achieved in commercial applications and older, larger homes.

For small businesses, the trial demonstrated that micro-CHP systems can cut overall site CO2 emissions by 15 to 20 per cent when installed as the lead boiler.

Such types of micro-CHP installations can also reduce heating bills by thousands of euros each year due to the reduced demand for grid electricity.

Deploying devices in the most appropriate applications is the key to maximising benefits.

The common success factor for both domestic and commercial applications is matching the thermal output of Micro-CHP devices to the buildings where they are used, to ensure that they operate for many hours at a time, rather than intermittently.

The carbon saving potential of Micro-CHP has therefore been found to be best in buildings which require long and consistent heating periods.

The Carbon Trust proposes that micro-CHP should be considered as eligible for government policy support, alongside other micro-generation technologies.

"The trial has also showed that manufacturers should focus further on optimising the electrical performance of their micro-CHP devices, as this is the key to achieving higher carbon savings in future," the Carbon Trust stated.

Micro-CHP systems provide a source of heat from the energy generated from the local production of electricity.

The waste heat of generation consists of combustion exhaust gases that can be used to provide heating to systems with low temperature demands.

Various micro-CHP products are commercially available and others are nearing market but to date there has been limited data available regarding the real-world performance of such systems, the Carbon Trust stated.

The Carbon Trust is a private company set up by government in response to meet the UK's international comittments to reduce CO2 output and thus climate change.

This week the Confederation of British Industries (CBI) issued a report claiming that industry is committed to making changes to tackle climate change.

The report says that the UK's carbon reduction targets for 2020 are likely to be missed but its 2050 goals are achievable if a greater sense of urgency is now adopted.

Tom Delay, chief executive of the Carbon Trust said the report indicates that UK businesses are making an effort in CO2 reduction.

"This report is further evidence that shows UK business has not just woken up to the climate change debate but is on the move to engage and tackle it," he stated. " Our own research shows that more and more businesses of all sizes are acting to reduce their carbon footprints and this new report from the CBI will provide extra momentum to this new important business movement."

The EU's "cap-and-trade" emissions trading scheme took effect from January 2005, seting limits on each manufacturer's CO2 outputs.

Companies can then to buy and sell CO2 emissions rights according to need on specially constructed Internet sites.

Plants that emit more CO2 than their allocation need to buy allowances to cover the extra emissions. Companies that emit less than their allocation are able to sell the allowances to companies that need them.

Last week the European Commission sets total CO2 allowances for the bloc at 2.08bn tonnes for the 2008 to 2012 trading period, a 10 per cent cut from the amounts requested by the bloc's governments.

The cuts means processors and others participating in the ETS face further pressure to reduce greenhouse gases produced by their operations -- or spend more to buy credits.

The food processing industry is an energy consumer and discharger of greenhouse gas through its reliance on cooking, refrigeration, freezing and air compressor systems.

ETS is mandatory for food and drink companies operating combustion installations with a rated thermal input exceeding 20 MW.

The importance of the scheme for the food and drink sector is reflected in the fact that, for instance, in France 13.6 per cent of all ETS installations are food and drink sites.

In the UK the food and drink industry make up 3.1 per cent of the estimated allocations.

Currently Hungary, Latvia, Malta and Lithuania, Poland and the Czech Republic are taking the Commission to court over the reductions to their allocations. The countries claim that the allocations will harm their industrial sectors.