Leading global carbon asset developer Camco Group has reached an agreement to buy 1 million tons of CO2 emissions from the world's largest stainless steel producer Taigang Stainless Steel Co by late 2009 under the clean development mechanism (CDM) project.

The London-based Camco, also a selective buyer of carbon credits, didn't disclose the total deal figure, saying it's confidential. The average price of CO2 in the international market is about 10 euros per ton.

The project is using waste heat from Taigang's four steel-making product lines to generate power, which reduces CO2 emissions. The CO2 credits bought by Camco can be sold to developed countries with a CO2-reduction commitment to buy carbon credits from developing countries under the Kyoto Protocol.

The CDM project is aimed at making enterprises aware that they can derive economic benefits by shouldering social responsibilities, said Henrik Dalsgard, managing director of Camco.

Taigang has spent 3 billion yuan on energy-efficient and emission-reduction projects in the past three years, and another 2 billion yuan will be allocated in the next two years, said Liu Fuxing, deputy manager of Taigang.

"It's a trend: more and more steel companies will join the CDM project," said Hu Hao, an analyst from Central China Securities. "The steel industry is energy-intensive, so there are a lot of opportunities for steel companies to reduce emissions and get on the CDM bandwagon."

In January, Arreon Carbon Ltd and Credit Suisse International bought 6 million tons of CO2 credits from Baosteel at 10 euros per ton.

The first CDM project involving an iron and steel company was signed by Jinan Iron & Steel group and Camco, in a 12.4-million-ton deal.

Camco has already bought more than 120 million tons of CO2 credits all over the world.

(China Daily April 25, 2008)