Opportunities for Georgia companies to work in China’s methane harvesting market are growing, according to Dex Shi co-founder of GCG Technology and Investment, a U.S. subsidiary of Beijing-based private investment bank, New Resource Investment.
Based in Norcross, GCG is seeking U.S. and European companies to co-invest in New Resource’s developing projects in China and the U.S.
It recently entered a strategic alliance with United Kingdom-based investment bank, Climate Change Capital, to purchase greenhouse gas credits from Chinese companies that are capturing methane emitted from coal mines for use as an energy source.
Climate Change has more than $1 billion available to purchase greenhouse gas credits worldwide for resale to European companies that are looking to reduce their greenhouse gas emissions, according to Dr. Shi.
Since the Kyoto Protocol, an international agreement that obliges ratifying countries to reduce their greenhouse gas emissions, went into effect in 2005, many nations have required local businesses to cut their greenhouse gas emissions to meet country-wide reduction targets by 2012.
Since all European Union member states signed and ratified the agreement, reducing greenhouse gas emissions is a major objective for many European businesses. While the U.S. signed the Kyoto agreement, it never ratified it, and U.S. businesses are not legally bound to the same reduction targets as in Europe.
Developing nations are also not bound to the same reduction targets as wealthy countries, but they can reduce their greenhouse gas emissions to resell to developed nations. And purchasing credits from developing countries is generally a cheaper alternative to implementing reduction programs throughout a given company.
As a result, European investment banks that buy and sell greenhouse gas credits have looked to China — a major producer of greenhouse gases — for opportunities, Dr. Shi said, citing GCG’s methane harvesting program as an example.
A principal component of natural gas, methane is also a major contributor to global warming and is emitted from underneath the earth’s surface during the coal mining process.
Coal companies harvesting methane use the gas as an energy source, which saves the companies money by removing them from the national electricity grid, while providing greenhouse gas credits to European buyers.
Caterpillar Inc. and General Electric Co., both based in the U.S., are currently selling engines that convert methane to power in China and can provide good examples for other American companies looking to enter the market, according to Dr. Shi.
“GE and Caterpillar are already very active in the country, and I think American companies can learn a lot from them,” he said. “If U.S. companies can bring capital and technology, then definitely they can benefit from this game,” said Dr. Shi.
He added that if the U.S. were to ever implement greenhouse gas reduction policies, the trading market would blossom even further, since the country is the largest emitter of carbon dioxide, another greenhouse gas.
“I do believe sooner or later, the U.S. will be in this game,” he said, referring to the carbon credit-trading market that is now being driven by Europe.
And even though China will continue to burn coal as a primary electricity source for many years to come, the country is also making moves to become more energy efficient, said Dr. Shi.
“China is actively pursuing alternative energy sources. They’re trying to figure out how to capitalize on and utilize all the wasted gas and wasted heat they are generating,” he said.
New Resource Investment, the parent company of GCG, which has about $100 million invested in all of China, is currently working with 10 companies in the country that are looking to reduce their greenhouse gas emissions for sale on a trading market.
In addition to identifying potential companies for such programs, New Resource must also work with the Clean Development Mechanism executive board, which supervises the world’s greenhouse gas trading under the United Nations, to get the Chinese companies authorized to sell their emissions.
The process, which includes extensive documentation and supervision of technologies, can take more than one year to complete.
Story Contacts, Links and Related Stories
Dr. Dex Shi – (770) 552-6037
GCG Technology and Investment – web: www.gcgti.com
Climate Change Capital – web: www.climatechangecapital.com