Journalists have learnt from Wuhan Iron and Steel (Group) Corp (WISCO), parent company of Wuhan Iron and Steel Company Limited (600005), that it had signed a cooperation agreement with Italian power company Enel SpA regarding clean development mechanism (CDM) programme. In the agreement, Enel SpA would buy carbon credits from WISCO. WISCO in turn would use the capital to conduct an energy efficiency programme and reduce carbon emission.

Under the Kyoto Protocol, developed countries were required to cut carbon dioxide emission by 5.2% based on the volume in 1990. During this time, developing countries were not required to assume emission reduction duties. Under this flexible mechanism, developed countries provided capital and technology to developing countries to experiment in various energy efficiency programmes in which carbon credits achieved by developing countries offset developed countries' promised emission reduction volume.

WISCO, China's second largest steel maker, had five CDM projects approved by UN certification bodies. With a total investment of over RMB 3 bln, these five projects could generate 3.16 million tons of carbon dioxide credits annually. Based on the contract price, WISCO will receive RMB 300 mln every year from Enel SpA during the contract period.

Source: www.hexun.com

Date: 8 May 2008

CN01/SW/BT/WH