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ADB Opens First Clean Development Mechanism Facility Project to Buyers
MANILA, PHILIPPINES (16 March 2005) - An ADB-backed Coal Mine Methane/Coal Bed Methane Utilization Project in Fuxin, the People's Republic of China (PRC), is the first project under its Clean Development Mechanism (CDM) Facility to be presented to carbon buyers.
Between 2006 and 2012, more than 5 million carbon credits are expected to be generated from the Fuxin project, which is part of an Environmental Improvement Project in Liaoning, backed by an ADB loan of $70 million approved in November 2004.
ADB will help the project find a buyer for the credits and facilitate the transaction process during 2005.
The project will improve coalmine methane and coal bed methane extraction, distribution, and utilization, thus boosting coal mine safety, and supplying methane as a clean fuel to residents, industry, and electricity generation schemes.
It will reduce greenhouse gas emissions by capturing and using methane that would otherwise be released into the atmosphere during the mining process.
The CDM is a market-based financial instrument set up under the Kyoto Protocol that allows industrialized countries to invest in developing country projects and acquire greenhouse gas emission reduction credits, or carbon credits, that they can then use to meet their greenhouse gas reduction targets under the protocol.
The Kyoto Protocol sets binding targets for industrialized countries for the reduction of greenhouse gas emissions that would lower the risk of global climate change. As a greenhouse gas, methane is 21 times more potent than carbon dioxide.
ADB's CDM Facility was set up in September 2003 to provide technical and administrative assistance to eligible projects in parallel with project identification and loan processing.
"The goal of the CDM Facility is to support projects that will contribute to sustainable development, and benefit local communities. The Fuxin Project will reduce greenhouse emissions, as well as improving safety conditions and access to clean fuels for mining communities," says Ms Rita Nangia, ADB's Director responsible for the CDM Facility.
"ADB will also continue to provide underlying finance to projects that can produce tradable emission reduction credits, such as the Fuxin component of the Environmental Improvement Project in Liaoning."
ADB is inviting entities to submit expressions of interest to purchase carbon credits from the Fuxin project until 31 March 2005. See www.adb.org/cdmf for details.