The income-generating means of CDM projects are: CDM’s huge business opportunities Li Junfeng, an expert on the clean development mechanism project of the National Development and Reform Commission and secretary-general of the Renewable Energy Professional Committee of the China Association of Comprehensive Utilization of Resources, told this reporter yesterday: “A project (of the clean development mechanism) can help

The company received additional financial support of approximately several million euros, which greatly reduced the financing risks of the company's development projects and increased profit margins." Li Junfeng revealed that it is expected that about a dozen such projects will be approved in China in 2005.

According to the provisions of the Kyoto Protocol, greenhouse gas emission reduction targets must be extended to at least 2012.

According to this extrapolation, even conservatively estimated, such projects can bring at least billions of yuan in financing opportunities to Chinese companies.

Huge business opportunities for CDM The Clean Development Mechanism is one of the three flexible mechanisms for greenhouse gas emission reductions stipulated in the Kyoto Protocol.

The CDM allows Annex 1 Parties and non-Annex 1 Parties to jointly carry out greenhouse gas emission reduction projects such as carbon dioxide (hereinafter referred to as "CO2").

The amount of emission reductions generated by these projects can be used by Annex 1 Parties to meet their commitments to limit or reduce emissions.

For developed countries, CDM provides a flexible compliance mechanism; for developing countries, part of the financial assistance and advanced technology can be obtained through CDM projects, which will help developing countries ultimately realize the United Nations Framework Agreement on Climate Change.

The goal.

The other two flexible mechanisms for reducing greenhouse gas emissions are the "Joint Implementation Mechanism (JI)" and the "Emissions Trading Mechanism (ET)", which mainly involve cooperation between developed countries and have no direct connection with Chinese companies.

Article 12 of the Kyoto Protocol stipulates that CDM applies to emission reduction projects or CO2-absorbing afforestation projects between developed and developing countries.

The emission reduction units obtained under the CDM are “certifiable emission reductions” (CERs, Certified Emission Reductions).

According to reports, in order to fulfill their commitments under the Kyoto Protocol, developed countries will need to purchase approximately 200 million to 400 million tons of CO2 equivalent greenhouse gases through CDM projects every year in the five years from 2008 to 2012.

This will require a large number of CDM projects to meet the needs.

Research by the World Bank shows that China will be able to provide more than half of the projects required by the world's clean development mechanism, equivalent to approximately 100 million to 200 million tons of CO2 equivalent greenhouse gases.

This will also bring huge economic benefits to China.

Research by the Clean Development Mechanism Research Group of Tsinghua University shows that CDM projects are expected to result in a net increase in foreign investment of RMB 1.9646 billion in 2005, and will reach RMB 3.9442 billion in 2010.

Data from Tsinghua University’s Clean Development Mechanism Project Research and the list of alternative projects from the National Climate Change Countermeasures Coordination Group of the National Development and Reform Commission show that from 2002 to 2005 alone, there will be approximately 7.7348 billion yuan (approximately US$931.9 million) in funding

It has been invested in the development of four CDM projects in China. These four projects are the Xiaogushan Hydropower Station started in early 2003, the Inner Mongolia Huitengxile Wind Farm Project started in 2004, and the Jilin Taonan Project expected to be put into operation in October 2005.

The 49.3MW wind farm project and the Yunnan Daliangzi Hydropower Station are expected to start construction in December 2005.

CDM Road to China Since 2002, CDM projects have entered China.

In the second half of 2002, the Dutch government and the Chinese government signed a contract for China's first CDM project, the Huitengxile Wind Farm Project in Inner Mongolia Autonomous Region. The contract stipulated that the payment price of CERs was set at 5.4 euros/ton of CO2, and the CDM project's annual average CO2 reduction

The emission volume is approximately 54,000 tons, and the emission reduction period is 10 years.

Chinese companies investing in the project received a total income guarantee of approximately RMB 270 million (€27 million).

For the Xiaogushan Hydropower Station (XHP) project, the project investor is the World Bank’s Pilot Carbon Fund (PCF).

The project’s total CO2 emission reduction credits are 3,723,000 tons, and the CERs are approximately US$4/ton of CO2.

Therefore, the Chinese investment company Xiaogushan Hydropower Company in this project will receive an investment of nearly US$15 million.

In addition, the "Youth Afforestation Project to Combat Desertification in Aohan Banner in Northeast China" signed by the State Forestry Administration of China and the Italian Ministry of Environment, Land and Resources in accordance with the relevant regulations of the CDM afforestation and reforestation carbon sequestration project will be officially implemented in the near future.

In the next five years, the two parties will invest US$1.53 million to afforestation 3,000 hectares of deserted sandy land in Aohan Banner, Inner Mongolia Autonomous Region, my country.

Clean Development Mechanism, referred to as CDM (Clean Development Mechanism), is one of the three flexible performance mechanisms introduced in the Kyoto Protocol.

According to the principle of "similar but differentiated responsibilities", developed countries that have completed the industrial revolution should bear more historical responsibilities for global warming. Therefore, the Kyoto Protocol only sets emission reduction tasks for industrialized countries, but does not

This requirement is made for developing countries.

On February 16 this year, the Kyoto Protocol came into effect.