BEIJING China could have as much as $3 billion
coming to a state-owned fund that supports emissions-reducing
ventures, if a slate of projects on its books win U.N.
approval, the Finance Ministry said on Friday.
As of last month, China had approved 885 projects, which
would prevent emissions equivalent to 1.5 billion metric tons
of carbon dioxide and generate credits worth $15 billion.
"Out of that, the state can take $3 billion to use for the
Clean Development Mechanism (CDM) fund," China's Ministry of
Finance said in a notice on its Web site (www.mof.gov.cn) that
announced the official launch of the fund.
The CDM is part of the Kyoto Protocol. It allows rich
nation polluters to fund emissions-cutting projects in the
developing world in return for credits to put towards domestic
Beijing levies a fee on all CDM projects and has said it
will use the cash to support activities to tackle climate
change, from raising public awareness to mitigation and
Managed by the Ministry of Finance, the fund appears to be
profiting from China's dominant position in the CDM market,
which the World Bank estimates was worth about $5.5 billion in
It is the top producer of credits, with particularly large
volumes coming from projects to destroy an industrial gas HFC
23, which is thousands of times more potent than carbon
Because the gas is relatively cheap to destroy in
proportion to the amount of credits it earns, and projects do
little to further Beijing's goal of cleaning up its energy
infrastructure, they attract a 65 percent tariff.
TOP EMITTER, NO CAPS
China is set to overtake the United States as the top
emitter of carbon dioxide as early this year, the International
Energy Agency has said, although on a per capita basis they are
just a fraction of Western levels.
Beijing rejects binding caps on emissions, which it fears
could dent growth, and instead has been touting greater
efficiency and more renewable energy.
World governments are meeting in Bali next month to begin
mapping out a plan to succeed Kyoto, which obliges 36
industrial nations to cut greenhouse gas emissions to 5 percent
below 1990 levels by 2008-2012.
But on Friday, China repeated its position that rich
countries responsible for most of the greenhouse gases already
in the atmosphere must do more.
"Only if developed countries continue to take the lead to
practically fulfill their emissions obligations can the Clean
Development Mechanism gradually mature and continuously
develop," the Finance Ministry quoted Vice Foreign Minister
Zhang Yesui as saying.
The Bali meeting must pay attention to CDMs so the
mechanism can continue to have a role to play beyond 2012, he
Among China's recent CDM projects, Handan Iron and Steel
Group registered a project collecting waste gas to use for
power generation with the United Nations, allowing it to sell
credits for cutting emissions, the China Securities Journal
Handan expects to earn 200 million yuan ($26.64 million)
through selling credits over the next five years. It has
invested 920 million yuan in the project, which will generate
36 percent of its power and reduce fuel costs.
China's steel industry is dominated by resource-intensive
blast furnaces that consume iron ore and account for about half
of emissions by the steel sector globally.
(Additional reporting by Lucy Hornby; Editing by Emma
Graham-Harrison and Alex Richardson)