The EU's scheme, key to its efforts to meet commitments under the Kyoto Protocol, kicked off in January.

It sets limits on the amount of carbon dioxide (C02) energy-intensive installations like power plants can emit and allows them to buy or sell allowances that give them the right to release the main gas blamed for global warming.

"I think it's had quite an enthusiastic start," Marcu said of the EU system, speaking at a trade fair on Friday.

He said volume -- in terms of monetary value and C02 tonnage -- would increase substantially over the next year to 18 months.

"There's no doubt in my mind the momentum is there," he said, adding the participation of major financial institutions like Morgan Stanley proved that interest in the young market was strong.

Marcu, whose organisation represents more than 100 companies around the world, said he was hopeful Canada would develop a similar trading scheme to be linked with the EU one so that a global emissions trading system could emerge.

US MISSING LINK

Despite interest by some northeastern US states in creating emissions trade and rumours that California Gov. Arnold Schwarzenegger was eyeing a similar move, Marcu said American participation was a missing link in the market's development.

"We're looking at the big piece that is missing to make this a truly global market, and that is the US," he said.

"This is the probably one of the few if not the only major markets that has emerged over the last decades that has not started in the US," he said.

He would be surprised if major US companies, which foresee carbon restrictions, would be content to miss out on he experience that their European competitors were getting in carbon "cap and trade" systems.

The group, known as IETA, counts German utility RWE, France's Total, Spain's Endesa, Dow Chemical Co., DuPont Inc. and oil major BP among its members.

The value of the market itself -- one trader has estimated it eventually could be worth as much as 50 billion euros ($64.23 billion) annually -- was something US traders would not want to miss out on, Marcu said.

"I would be very surprised if the trading community in the US doesn't want to be a part of this," he said.

Marcu said the environmental objectives of emissions trading attracted interest.

"It's got this characteristic of environmental improvement and protection which, maybe not in a quantifiable way, does attract some people to the market," he said.

"It's not philanthropy, it's pure business, but ... the fact that it produces an additional kind of effect of proving that you can use markets for meeting environmental results -- I think it's an interesting thing to many people."

Will emissions trading end up helping the environment?