UPDATE 1-US House climate bill to include free carbon permits

(Recasts lead, updates throughout)

By Ayesha Rascoe

WASHINGTON, April 23 (Reuters) - A U.S. House of Representatives bill aimed at fighting global warming will allow some polluters access to free permits to emit greenhouse gas emissions in its cap-and-trade system, Democratic Representative Edward Markey said on Thursday.

"There are going to be some free allocations of allowances," Markey told reporters, without specifying what entities would receive the allowances.

Markey and House Energy and Commerce Chairman Henry Waxman unveiled climate-change legislation last month that would limit greenhouse gas emissions and require companies to acquire permits to emit carbon dioxide.

U.S. President Barack Obama has supported auctioning all carbon permits, essentially making big polluters such as coal-powered power plants pay heavily for their emissions. The White House has indicated flexibility on this point, however.

Markey said backers of the bill are talking with all members of the Energy and Commerce Committee on how to structure the carbon allowances.

"We are working toward finding a formula that can work and deal with the impact on industry and consumers while solving the problem that climate change poses," Markey said.

The committee is holding a hearings marathon this week on the bill that Democratic leaders want approved by the panel by Memorial Day, with a full chamber vote later this year.