By staff at Masdar, United Arab Emirates

ABU DHABI – Masdar, a wholely-owned subsidiary of Mubadala Development Company focused on renewable energy and sustainability, and E.ON of Germany, one of the world’s leading utility companies, have agreed to establish E.ON Masdar Integrated Carbon (EMIC), a joint venture (JV) company focused on developing carbon emission reduction projects on the global market.

Based in Abu Dhabi’s Masdar City, EMIC will capitalise on the growth in the carbon market to “monetize” (sic) emission reductions resulting from improving the energy efficiency of industrial facilities. The company will develop, finance and implement projects in the Middle East, Africa and Asia with a particular focus on power generation and oil and gas.

The emission reductions will be ‘monetized’ in the form of carbon credits and traded under the current United Nations based Clean Development Mechanism or other applicable future international climate trading schemes.

CEO of the Abu Dhabi company, Dr. Sultan Ahmed Al Jaber, said: “This initiative builds on our already established successful relationship with E.ON and our matching vision about the carbon market and the choice of technology. It is a good opportunity to ‘leverage’ our competitive advantage to create value on the global market."

EMIC will be one of the leading edge companies in the full value chain management of a carbon abatement projects, and will be able to achieve this all in-house.

The JV will capitalise on the strengths of its parent companies to identify and develop opportunities within the target markets. Projects will focus on technologies with large carbon abatement reduction potential, namely: fuel switching, open cycle to combined cycle gas turbine conversion, gas pipeline-leakage reduction, and gas-flare reduction.

Carbon abatement

CEO of E.ON Climate & Renewables, Frank Mastiaux, said: “This activity focused on the carbon market will add another strong pillar to the already substantial business relationship between E.ON Climate & Renewables and Masdar in the space of sustainable and renewable energy. The JV underlines our strong commitment to create a global project-driven carbon abatement business. Masdar and E.ON’s combined significant and complementary expertise and market exposure will give the new company a leading edge in the market."

The global carbon market has witnessed sharp growth in recent years reaching US$168 billion in 2009, with a 68% increase over 2008 in global trading volume.

The establishment of EMIC is subject to obtaining the required regulatory approvals and completion of other conditions precedent to closing; it is expected that these will be finalised during the first quarter of 2010.

Masdar and E.ON Climate & Renewables already work together in the on the London Array. Once complete, the scheme will be the world’s largest, and the first one gigawatt, offshore wind farm. Sited in the Thames Estuary, the project will supply enough power for around 750,000 homes – or a quarter of Greater London homes – and displace the emission of 1.9 million tonnes of carbon dioxide (CO2) every year.