The Emission Trading Pilot Scheme for Thermal Power Plants in the Pearl River Delta Region will hopefully reduce emissions in Hong Kong and Guangdong, Secretary for the Environment, Transport and Works Sarah Liao said yesterday.

Speaking after the seventh meeting of the Hong Kong-Guangdong Joint Working Group on Sustainable Development and Environmental Protection, Liao said the two sides had endorsed a framework for the implementation of the pilot scheme.

The pilot scheme calls for the voluntary participation of power plants in the Pearl River Delta (PRD) region. A Hong Kong-Guangdong emission trading management team will be set up as soon as possible for the promotion and administration of the scheme.

Describing it as "a very good scheme", she said it would provide a platform with economic benefits to power companies and encourage trading partners to sign contracts.

The management scheme could utilize the flexibility in emission trading and draw up agreements to meet the needs of different parties to reduce emission of air pollutants in the region.

Such schemes have proved very effective in developed economies, reducing pollution and benefiting the economy, Liao said.

The power companies that join the management scheme would have to meet the 2010 emission reduction targets agreed by Hong Kong and Guangdong.

Hong Kong's two power companies, Hongkong Electric Company and China Light and Power, have not yet expressed their interest to join the management scheme. But Liao hoped that the power companies in the PRD region would ultimately join it after its details were announced next year.

Guangdong Environmental Protection Bureau Director Li Qing said details of the pilot scheme would be announced after the provincial government cleared all the procedures.

The management team is likely to be formed early next year and has become a priority for both the sides, a government source said.

The team will serve as an organizer, answering and clarifying questions and recommendations from the region's power companies.

Other government departments, such as the Economic Development and Labour Bureau, too, may be invited to join the team.

Once the recommendations on emissions are agreed upon, the team would take over the responsibility for the scheme's register arrangement and operations.

No timetable will be set for the two Hong Kong power companies to say when they would join the pilot scheme.

Editor: Yan