EDF Trading signed a letter of intent with China National Bio Energy Co Ltd, a renewable energy developer invested by the State Grid Corp of China, to purchase carbon credits from its China National Bio's three biomass power generation projects located in China.

The accord was based on the clean development mechanism (CDM) system under the Kyoto Protocol's climate improvement initiatives. The international Kyoto Protocol allows affluent countries to achieve greenhouse gas emission targets by funding pollution cuts in developing nations and has spawned a global carbon market.

Located in East China's Shandong Province and Northeast China's Heilongjiang and Jilin provinces, the three CDM projects are expected to come on stream in the first half of next year, and could cut carbon dioxide emissions by as much as 1.5 million tons a year by 2010, said Lin Mingshan, general manager of Beijing-based China National Bio.

"These are the projects that will benefit both sides. China is fulfilling its duty to improve the nation's environmental conditions by massively investing in such projects," Lin said.

Lin yesterday refused to give the financial figures involved in the EDF deal.

Established in July last year, China National Bio is currently building as many as 14 biomass generation plants across the nation, boasting a total installed capacity of 350 megawatts (MW). These plants use biomass sources such as the stems of cut wheat to generate electricity.

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