"By then, we will be able to cut greenhouse gas emissions by as much as 12 million tons per year," the company said in a statement, without disclosing the investment involved.

Lin told China Daily that he expected more such CDM co-operation deals to be hammered out in the future with EDF or other potential buyers.

The carbon credit market in China is heating up with the central government's recent incentives prompting an increasing number of energy firms to heavily invest in renewable energy projects.

"The potential of the CDM market in China is huge," Wang Qi, secretary-general of Beijing-based China CDM Federation, told China Daily in an earlier interview.

"There's great potential for profitability. An increasing number of companies, big and small, domestic and foreign, are flocking into China's carbon market," said Jiang Yun, programme manager of the China Energy Conservation Association.

EDF Trading was set up five years ago and became a wholly owned subsidiary of EDF Group in mid-2003.

Now one of the leaders in European wholesale trading of electricity, gas and coal, EDF Trading optimises EDF's distribution and generation network through buying and selling both electricity and primary fuels, and manages EDF's diverse commodity risks on an integrated basis. European energy giant EDF operates coal-fired power plants with an installed capacity of 3,720 MW in China.

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