By Susanna Twidale

LONDON (Reuters) - Britain's greenhouse gas emissions fell 1.9 percent in 2013 due to a decline in fossil-fuel power generation, preliminary government data showed on Thursday.

Output of the heat-trapping gases in Europe's second-largest emitter dipped to 569.9 million metric tons compared to 581.1 million metric tons in 2012, data from the Department of Energy and Climate Change (DECC) showed.

Carbon dioxide (CO2), the main greenhouse gas blamed for climate change, accounted for 82 percent of 2013 emissions and fell 2.1 percent to 464.3 million metric tons.

The bulk of Britain's emissions, some 38 percent, came from energy supply, followed by transport at 25 percent, residential at 17 percent and business at 16 percent. The rest came from sectors including agriculture and waste management.

DECC said the overall fall largely resulted from an 8 percent decrease in emissions from electricity generation, spurred by a 9 percent reduction in coal use and a 7 percent fall in gas use.

Data published in February showed overall UK power generation fell 2 percent to 321.60 terawatt-hours in 2013.

Coal-fired power generation is a big contributor to greenhouse gas emissions because burning the fuel produces almost double the amount of CO2 than gas-fired generation.

British utilities are major buyers of carbon permits under the European Union's Emissions Trading System, which requires big emitters to surrender one permit for every tonne of carbon dioxide (CO2) they emit each year.

However, the fall in emissions is unlikely to mean Britain's carbon permit demand declined in 2013. An ETS rule change from January 2013 means most EU utilities received no free allowances last year and must pay in full for the scheme's 2013-2020 phase.

On April 2, the European Commission will grant access to 2013 CO2 figures for the near 12,000 installations covered by the EU ETS, which account for around 45 percent of the bloc's greenhouse gas emissions.

The data release is an important date in the EU carbon market's calendar as it gives a glimpse of the overall demand-supply balance for EU emission permits.

Britain has a legally binding target to cut its CO2 emissions by 2050 to 80 percent below 1990 levels.

UK emissions have so far fallen 21 percent since 1990, DECC said.

(Reporting by Susanna Twidale; Editing by Dale Hudson)