South Korea plans to invest 40 billion won (US$33 million) of its national carbon fund in a biomass power generation plant in central China, the government said Tuesday.
The move will allow the country to earn extra emission credits in the future.
The Ministry of Knowledge Economy said the specialized fund has been offered to a consortium led by LG International Corporation, Hana Bank and the state-run Korea Trade Insurance Corporation (K-sure).
LG will build the 60 megawatt plant, which is expected to go online in 2012, in Shanxi Province, with Hana and K-sure providing the necessary financing and insurance coverage.
The plan calls for using fallen branches from over 50 million apple trees as biomass fuel. The ministry claims the move can cut greenhouse gas emissions by 320,000 tons annually due to the reduction in the burning of coal. Under the clean development mechanism (CDM), South Korea can receive credits for the reduction.
The CDM outlined by the Kyoto Protocol regime is a system that allows countries and businesses to make overseas investments in projects that can reduce overall greenhouse gas emission levels. The total saved from such projects can be used as credits by a company or country.
It can also be traded on a carbon market.
The ministry said the total cost of the project is worth 70 billion won with 57 per cent of the total coming from the carbon fund created in 2007.
It said the Shanxi project marks the first time Seoul has invested its carbon fund in a foreign endeavor. So far, it has used 15 billion won of the 100 billion won fund on a solar power installation in South Korea in 2008.
Copyright 2005 Yonhap News Agency All Rights Reserved
