London, 20 September (Argus) — The EU will provide China with €25mn ($32.3mn) to fund projects to reduce greenhouse gas (GHG) emissions, the European Commission said today.

The projects will focus on reducing water use, waste and heavy metal pollution through sustainable urbanisation policies, as well as the implementation of emissions trading systems in China. The projects will be implemented over a period of four years.

EU commissioner for development Andris Piebalgs and China's commerce minister Chen Deming signed the financing agreement to “promote the environment and transition towards a low-carbon economy”.

The agreement is a critical step for closer co-operation towards a “robust international carbon market”, EU climate action commissioner Connie Hedegaard said. “It makes a significant difference when now also China wants to use carbon markets to reduce emissions cost-effectively and boost low-carbon technologies,” she said. This opportunity will allow the countries to modernise their economies, stimulate growth and create clean energy jobs, Hedegaard added.

The EU plans to assist Chinese cities in adopting energy and resource-efficient solutions by sharing knowledge on sustainable urbanisation. The focus will be on the establishment of an innovative control technology (ICT)-based knowledge platform to encourage dissemination of information. The project will also focus on the facilitation of networking and co-operation between Chinese and European civil society participants, particularly at the local level, the commission said.

The ultimate goal is to help China in meeting its carbon-intensity targets and in the long run, contribute towards achieving a global reduction of GHG emissions. China is the world's biggest emitter of CO2.

The EU will help support the design and implementation of emissions trading systems in China. China's government plans to launch a national carbon market by 2015 and plans to utilise knowledge gained from developing regional pilot schemes in the municipalities of Beijing, Shanghai, Shenzhen, Chongqing, Tianjin, and the provinces of Guangdong and Hubei. Guangdong launched a carbon emissions trading pilot project on 11 September, Beijing launched its pilot trading scheme on 28 March but the project will not be operational until next year, while Shenzhen hopes to roll out its carbon trading market by the end of this year and starting trading in early 2013.

Meanwhile, the third project the EU is funding is focused on implementing sustainable waste treatment policies to reduce water and heavy metal pollution.

These projects will “benefit all of us” and help achieve the EU and China's common objective of sustainable development of the planet, Piebalgs said. “The EU has a solid experience in the fight against climate change and the path towards a green economy that we are happy to share.”

The EU is very interested in the development of an international carbon market. The commission announced last month that Australia and the EU will link their respective emissions trading schemes (ETS) from 1 July 2015, with a full link to be established by 1 July 2018 that will make carbon units compliant in both systems.

“This would be a significant achievement for both Europe and Australia. It is further evidence of strong international co-operation on climate change and will build further momentum towards establishing a robust international carbon market," Hedegaard said on 28 August.

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