[en] The potential impact of energy policy in the UK and the European Union on the hydroelectric power industry is assessed. The view that hydro can be a major factor in avoiding emissions of carbon dioxide to atmosphere may be changing and today's debate is whether its negative effects outweigh the positives. The article discusses the Kyoto protocol, emission credits and the way in which dams lead to rotting vegetation which in turn releases methane. The article briefly discusses the UK Climate Change Levy, the UK Utilities Bill, the proposed EU Directive and how environmental issues impact on the choice of electricity generation. It is feasible that large hydro schemes will be excluded from EU trading arrangements