Fuxin Mining Group based in Northeast China's Liaoning Province has forged two separate agreements to improve coalmine methane and coalbed methane extraction in mines around Fuxin.
One deal was with Natsource Europe Limited which gives energy brokerage and advisory services for natural gas, coal, and electricity and environmental markets. The other deal was with the UK's ICTJ Limited, a carbon credit trading company. Both agreements were signed in Beijing yesterday.
If developed countries invest in projects in developing countries acquiring greenhouse gas emission reduction credits (carbon credits) these can then be used to meet their greenhouse gas reduction targets under the Kyoto Protocol.
Vice-president Zhang Yunfu from the Fuxin Mining Group said the projects would improve safety in mines and supply methane as a clean fuel to residents, industry and electricity generation schemes. The schemes will also allow so-called carbon credits to be claimed to meet greenhouse gas reduction targets.
They will reduce greenhouse gas emissions by capturing and using methane that would otherwise be released into the atmosphere during the mining process, said Zhang.
The agreements were organized by the Asian Development Bank's Clean Development Mechanism (CDM) Facility and Cleanworld Energy, a clean energy development firm which has its headquarters in Beijing.
The CDM is a market-based financial instrument set up under the Kyoto Protocol. The Kyoto Protocol sets binding targets for industrialized countries to reduce greenhouse gas emissions that will lower the risk of global climate change. As a greenhouse gas, methane is 21 times more potent than carbon dioxide.
The biggest amount of credits were purchased by ICTJ Limited, according to the UK firm's Dave Allen.
He said ICTJ Limited was established by the shareholders of ICECAP Limited to carry out trading activities in carbon emissions.
"We believe it will become the template for sales of carbon emission reductions out of China," he said.
David Kandolha of Natsource said there was potential to improve safety conditions in the mining sector, reduce greenhouse gas emissions and produce clean affordable energy.
Cash for the projects has been secured, with the Asian Development Bank approving a loan of US$15.8 million in November 2004, he said.