Chinese power firm's emissions trading reaps millions

A Chinese power generating firm that uses coal-bed methane as materials announced on Friday that it received 278 million yuan (44 million U.S. dollars) in 2012 through participating in an emissions trading scheme that forms part of the Kyoto Protocol.

The Shanxi Jincheng Anthracite Mining Group (JAMG), based in China's largest coal-producing province of Shanxi, generated 1.4 billion kilowatt hours of electricity last year with natural methane gas extracted from coal beds, according to the company.

Coalbed methane is a byproduct of coal, and a major danger in coal mines. If it is explored, coal mines will have methane content slashed by 70 percent to 85 percent and become much safer.

As a clean energy source close to natural gas, coalbed methane can be used as industrial chemical, a domestic fuel and for electricity generation.

Through the Clean Development Mechanism (CDM) defined in the Kyoto Protocol, the JAMG sold its certified emission reduction credits, each equivalent to one tonne of carbon dioxide, to industrialized nations needing to meet emission reduction targets under the protocol.

The JAMG has 91 gas turbine generators with an installed capacity of 189 megawatts, 138 megawatts of which belong to the CDM project. It can consume more than 300 million cubic meters of coal-bed methane annually and reduce carbon dioxide equivalent to 4.66 million tonnes every year.

The Kyoto Protocol is an international agreement linked to the United Nations Framework on Climate Change, which commits its parties by setting internationally binding emission reduction targets.

The CDM allows emission-reduction projects in developing countries to earn certified emission reduction credits. These credits can be traded and sold, and used by industrialized countries.

The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets.