Chinese utility Datang has set up a joint venture with European energy trader Mercuria to develop opportunities in the emerging Chinese carbon market.
It is not clear how the venture, DTM Energy Technology Development, will be funded. A statement from the companies said it will get financial backing and business support from both Datang’s wind energy subsidiary, Datang Renewable, and Mercuria’s Asian arm, Mercuria Energy Asia Investment.
The new company will aim to reach a leading position in the Chinese carbon market as well as explore international emissions market opportunities, say the companies.
China does not have much of a carbon market to date, though it has been the biggest beneficiary of the UN’s clean development mechanism (CDM), selling thousands of carbon emission reduction (CER) certificates to companies such as Mercuria.
However Beijing intends to launch six regional pilot emissions trading schemes in 2013, which some believe could develop into a larger national market.
Senior officials have also recently revealed plans under discussion for a cap on energy consumption by 2015, which could be linked to caps on carbon emissions.
In the meantime, Datang and Mercuria say they will also use their new partnership to expand their reach in traditional and renewable energy in new markets.
Datang Renewable listed in Hong Kong late last year and last week reported a doubling of first half net profits to 415.9m yuan ($65m).
Most of its revenues come from wind farms but it is also moving into solar power and working on the development of low carbon technologies.
