China's pilot pollution credit system, devised and used extensively in the West to reduce toxic emissions, is expanding, and looks like being extended. Huaneng Nantong Power Plant and Huaneng Taicang Power Plant are reported close to signing a deal to buy and sell sulphur dioxide emission quotas. Both operate under Huaneng Power International in Jiangsu. The Hauneng deal will make it the ninth such contract since the start of a pilot emission trading program between the State Environmental Protection Administration (SEPA) and the US-based Environmental Defence Force (EDF) in 2002. Implemented largely in the Yangtze River Delta region, the scheme incentivizes factories to pollute less by allowing them to sell emissions quota to factories that need additional quota to function. China had originally set a target of reducing sulphur dioxide emissions, the principal cause of soaring acid rain levels, by 10% between 2000 and the yearend 2005. Huaneng Nantong will pay RMB31m (US$3.7m) for a three-year emission quota from the Taicang plant.