China’s State Power Investment (SPI) Corp., one of the big five state-owned power companies, has teamed up with the city of Jiuquan in Gansu province in a bid to secure future carbon offsets from the city’s vibrant renewable energy industry ahead of the national ETS launch, Reuters reported.
The company, the outcome of a recent merger between China Power Investment Corp. and the State Nuclear Power Technology Corp., will buy the rights to the CCERs to be generated from a bundle of 23 solar projects in the city, Zhou Xuehai, vice mayor of Jiuquan, told reporters in Beijing.
The deal is the first move in what SPI hopes will become an arrangement earning it the rights to all the city’s future CCER projects.
China plans to launch a national emissions trading scheme in late 2016 or early 2017, which is expected to cover some 4 billion tonnes of CO2e per year by 2020, making it the world’s biggest carbon market by coverage.
SPI is looking to get into the market early to keep costs down, Han Shudong of SPI’s carbon asset management subsidiary told reporters. The company is also considering setting up a green fund, and developing various carbon-related financial instruments.
Jiuquan, meanwhile, is in the process of building 6.5GW of wind and solar power, and getting cash for carbon credits would help fund the projects.