"The first meeting of the (JI) supervisory board is a huge step forward, it is very important,"said Paul Soffe, associate director of UK-based EcoSecurities, a developer of emissions-reduction projects throughout the world.

"We are looking for there to be a timetable set out to allow projects to be registered in the second half of this year," he told Reuters.

JI is designed to offer rich countries low-cost ways to meet Kyoto emissions-reduction goals by earning credits through investment in climate-friendly projects abroad.

Under JI, investments must be made in countries with emissions reduction goals under Kyoto.

RUSSIA POTENTIAL

Most projects are expected to focus on Russia and Eastern Europe where there is massive scope to cut emissions by improving energy efficiency and industrial processes like power production.

"Russia and Ukraine have the biggest potential but they still have to sort out their (domestic) systems for approving projects," said Soffe.

Projects include green energy plants like windfarms or overhauls of existing industrial sites to cut pollution and energy use.

Eastern Europe is a natural seller of Kyoto credits because the closure of heavy industry since the fall of Communism slashed its emissions and left it well within Kyoto targets.

This week's meeting on JI comes as a similar Kyoto scheme - Clean Development Mechanism (CDM) - starts to take off after a slow start which critics blamed on excessive red tape.

Analysts say JI rules should be based on similar regulations to those used in CDM as any attempt to build an entirely new set of rules for JI could cause delays.

"The CDM has re-invented the wheel once, we don't need the JI supervisory board doing that again," said Liz Bossley of London-based consultants CEAG Ltd.