MOST Australian companies, including those already acting to reduce their greenhouse gas pollution, are far from ready for the introduction of emissions trading, according to consultancy group Ernst & Young.

Companies emitting more than 125,000 tonnes of carbon dioxide-equivalent annually are required to begin annual reporting by July 1 next year.

Rules affecting companies emitting as much as 50,000 tonnes are to be phased in over the following two years.

“There is quite a difference between what’s happening now, and the underlying resources and rigour in the measurement processes, and so forth, and what will be required when there’s a dollar value on carbon,” said Liza Maimone, a partner with Ernst & Young’s Climate Change Services team.

While many companies are used to reporting emissions of pollutants such as sulphur dioxide, most don’t yet have measurement processes for greenhouse gases, Ms Maimone said. While the former are typically single-point sourced, the latter will include everything from factory emissions to vehicle exhausts.

To add to companies’ uncertainty, “we’re still working in a situation where we’ve got no real standards for reporting,” she said.

A government team is examining reporting issues, with plans for a market regulator to be established in Treasury. “It will be like an (Australian Tax Office)-type process,” Ms Maimone said. “It will need to be to have the level of rigour required.”

At stake is the financial credibility of a market potentially worth billions of dollars that the Federal Government plans to start no later than 2012.

Companies failing to register or report accurately will face fines of as much as $220,000, Ernst & Young said, citing the National Greenhouse and Energy Reporting Bill.

Other areas of uncertainty include early abatement incentives, for which the government is seeking public submissions.

Companies have to consider whether it makes more financial sense to halt efforts to cut emissions between now and the start of trading, particularly if their existing measurement procedures are insufficient to prove they have cut back more than they otherwise would have.

Making it harder to judge what so-called additionality efforts are financially worthwhile is the absence of a carbon price, Ms Maimone said.

Another area of tension is how companies should work alone or in industry groups. “There’ll be the need to collaborate in order to put forward a position to government, but at the same time, there’s a recognition that each will be positioning against each other.”

PARIS: Groupe Danone SA is making a \12.3 billion ($16.8 billion) bid for Dutch baby food company Royal Numico NV to reinforce its position in the health food business, less than a week after announcing the sale of its cookie unit, the French company said Monday.

Danone and Numico expect “agreement can be reached” over the French food groups \55 (US$75) per share offer, which is a 44 percent premium over the average share price over the last three months, according to a joint statement.

“With this project, we are designing a new Groupe Danone, enhancing dramatically its growth profile and its growth potential for years to come,” Danone CEO Franck Riboud said in a statement.

Royal Numico CEO Jan Bennink said the offer was “a very attractive proposition for all of our stakeholders.” The bid, which Numicos board will recommend to shareholders, is not expected to lead to job losses, both companies said.

Last week, Kraft Foods Inc. offered to pay US$7.2 billion for Danones cookie and cereal division. Shedding the cookie division would allow Danone to concentrate on its dairy products and water unit and provide funds for new projects, Riboud said last week.

Prime Minister Francois Fillon promised his government will not interfere in the deal, in contrast to his predecessor Dominique du Villepin who in 2005 turned Danone into the symbol of “economic patriotism” by vowing to defend it against a rumored bid from PepsiCo Inc.

Danone was one of 24 “national champions” identified by the French senate last month as being vulnerable to takeover bids after a report by Ernst Young.

Numico said Monday it will seek to withdraw its shares from trading “as soon as possible,” providing Danones offer is declared unconditional. Shareholders will be able to vote on the deal in an extraordinary meeting mid-September when the terms and conditions will be published. A settlement date is expected in early October.

Goldman Sachs International, Citigroup and Allen Overy LLP are advising Numico, while Lazard, BNP Paribas and De Brauw Blackstone Westbroek NV are advising Danone.

Danone shares fell 3.3 percent Monday to close at \59.43 (US$80.95). Numico shares rose 11.38 percent to close at \44.50 (US$60.61).

(08-28) 12:05 PDT BEIJING, China (AP) —

A Chinese government-sponsored online game that allows players to battle corrupt officials and their bikini-clad mistresses has been overwhelmed by user demand, state media reported Tuesday.

The Ningbo Haishu District Discipline Commission in Zhejiang province launched “Incorruptible Warrior” to show people how to fight corrupt officials, Xinhua News Agency said.

But demand for the game was too great.

“It has been closed so it could be updated as more and more users have registered, overloading the server,” Xinhua quoted an unidentified commission official as saying.

Corruption remains widespread among high-level officials in China, despite public anger and repeated campaigns by the ruling Communist Party to uproot graft.

“The game requires players to learn government anti-corruption measures and to kill corrupt officials while avoiding attacks by their henchmen and mistresses clad in bikinis,” Xinhua said.

The game was released on July 25 and had reportedly attracted more than 10,000 players by Aug. 1. However, the game server could only accommodate 600 players at a time, according to head designer Hua Tong.

“The game is a new method of anti-corruption education,” Hua said.

It is not known when the game would be back online, Xinhua said.