UK-listed Camco has signed what it claims one of the largest
Kyoto-inspired emission reduction projects with China's Jinan Iron and
Steel Group.

The project
is expected to produce 12.3m tonnes of carbon credits over the next six
years by capturing and reusing waste gases from the steelworks.

Under the Kyoto protocol, businesses in signatory countries can meet
their emission reduction targets by funding projects to reduce
emissions in developing countries like China — this is the so-called
clean development mechanism (CDM).

It will the steelworks' responsibility to ensure the waste gases do
not get into the atmosphere. Camco's role in the project is to assist
the steelworks in securing the final validation report, project
registration and ensure the delivery of carbon credits by continuous
monitoring the project throughout its duration.

Camco is a good example of how innovative western businesses can
benefit from China's apparent enthusiasm for cleaning up its
worst-performing industries using CDMs and other mechanisms of the
Kyoto protocol — see our earlier story for more on CDM.

China currently accounts for the lion's share of Camco's work, but
the firm also has projects in six other countries. Under the Kyoto
protocol, there are several ways that emerging nations like China can
earn carbon credits, which they can then sell to industries in the west.

Camco says most of its projects fall in the energy efficiency
category, but it also has projects for methane destruction or energy
production from coal-bed methane. Other projects in its portfolio
involve renewable energy sources and the utilisation of waste heat in
cement production plants.

Despite the Domesday-laden scenario painted in our earlier story
it is good to see that there are tangible opportunities that small
western businesses can exploit to help now to give China — and the
rest of the world — a cleaner future.

Even if you don't understand Mandarin, Jinan Iron & Steel's corporate website
is worth a visit for its fractured English. An example: “Everyone in
Jinan Steel will feel carefree and joyous by its clean and tidy plant
site, beautiful environment and dense green culture. All Jinan Steelees
are proud of its green and beauty.”

UPDATE: Western companies interested in funding emission reduction projects in China should read this
opinion piece in the Financial Times written by two China-based
lawyers. They argue that the current system is risky for foreign
investors because government may hold back approval for a project if
the market price for emission credits is not high enough.