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China and Iceland strengthen geothermal cooperation

Iceland has signed a free trade agreement with China, becoming the first European country to do so.

Iceland-China-Free-Trade-Agreement-april-2013-2Iceland’s Foreign Minister Össur Skarphéðinsson signed the deal with China’s Commerce Minister Gao Hucheng in Beijing couple of days ago, bringing to a close six years of talks. The free trade agreement will lower tariffs on a range of goods and is expected to boost seafood and other exports from Iceland to the world’s second-largest economy.

During talks following a formal welcoming ceremony at the Great Hall of the People in the center of Beijing, Chinese Premier Li Keqiang said the free trade agreement was “a major event in China-Iceland relations”. He added that the agreement will “increase the soundness of business transactions and presumably the interest among Chinese and Icelandic companies that are cooperating in geothermal power”.

China is already benefiting from Iceland’s expertise after 80 Chinese students graduated from the United Nations University Geothermal Program in Reykjavik. The signature of the free trade agreement between China and Iceland comes only a year after the countries signed a special deal  to increase co-operation in the development of geothermal energy. 

When in Iceland in April 2012, China’s then-Premier Wen Jiabao concluded the agreement during the first stage of a four-nation European tour.

China-Geothermal-AreaIceland is on the forefront in geothermal energy utilization and is going to work with China, the world’s largest energy consumer, to develop geothermal resources. In an effort to meet an exponentially growing energy demand, as well as reduce its greenhouse gas emissions, China has become a leading investor in alternative energy technologies. China Petroleum & Chemical Corporation (Sinopec), the second largest oil and gas producer in the country, plans to make geothermal energy one of its main businesses.

The geothermal strategic partnership with China offers Iceland serious economic potential. Iceland is already working with India, countries in East Africa, Abu Dhabi, and several western countries to develop geothermal power projects. Geothermal energy resources are widely discovered in China, making the country riche in geothermal energy. The country is still in its infancy of developing and utilizing these natural resources, thus offering a huge market potential.

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