Citigroup, Gazprom in Pioneering Energy-Credit Deal in China

BY SHAI OSTER

BEIJING – Citigroup Inc. and OAO Gazprom closed a small but pioneering deal in China that could lay the foundation for a bigger nationwide market in carbon trading.

Under the deal, the American bank and the Russian gas giant bought energy-intensity credits from three Tianjin heating utilities that had outperformed efficiency targets set by the port city near Beijing. Worth a mere 500,000 yuan, or $73,250, the energy savings were packaged as carbon-emissions allowances that could be sold on to other utilities or buildings in the city that can't make this year's municipal goals.

"We see this as a start ...