Masdar, a wholly-owned subsidiary of Mubadala Development Company, and E.ON have teamed up to develop carbon emission reduction projects on the global market.

The joint venture E.ON Masdar Integrated Carbon (EMIC) will capitalise on growth in the carbon market to monetise emission reductions from improving the energy efficiency of industrial facilities, according to E.ON.

The new firm will develop, finance and implement projects in the Middle East, Africa and Asia with a focus on power generation, and oil and gas.

The emission reductions will be monetised through carbon credits and traded under current United Nations based Clean Development Mechanism or other applicable future international climate trading schemes.

EMIC will offer full-value chain management services in carbon abatement projects including fuel switching, open cycle to combined cycle gas turbine conversion, gas pipeline leakage reduction and gas flare reduction.

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

The new company is expected to be formed in first quarter of 2010, subject to regulatory approvals.