Geothermal energy is set to play a bigger role as the State-owned Sinopec Group makes inroads into the clean fuel's exploration and development through international technological exchanges designed to reduce the country's carbon footprint.

On Monday, Sinopec Star Petroleum Ltd, a wholly owned subsidiary of Sinopec, put a geothermal energy utilization project into operation in Henan province.

It will supplant natural gas consumption by about 4.87 million cubic meters annually and reduce carbon emissions of 70 million cubic meters, according to the company.

Geothermal energy, which is generated by and stored in the earth, is a clean fuel that can heat homes and generate electricity.

China is rich in geothermal energy resources. Its development will be crucial for the nation's energy savings.

According to the Ministry of Land and Resources, energy reserves in China's 12 major geothermal basins total 853 billion tons of standard coal equivalent.

Based on current technologies, usable heat produced each year equates to 640 million tons of standard coal, reducing carbon emissions by 1.3 billion tons.

The National Energy Administration plans to have a geothermal power generation capacity of 100,000 kilowatts by the end of 2015, capable of heating up to 500 million square meters.

Sinopec started developing such clean energy in 1998. Sinopec Star Petroleum is now the biggest geothermal energy developer in the country.

It has more than 90 geothermal wells over nine provinces, covering a total heating area of 10 million square meters and comprising one-fourth of the market share.

As a diversified oil and gas company, Sinopec has been learning from advanced foreign players.

In 2012, it signed an agreement with Icelandic geothermal developer Orka Energy Ltd to expand cooperation in advancing geothermal resources.

Iceland has 60 years of geothermal utilization history, which will help China improve its technology in the sector.

The two will work at growing their joint venture, Shaanxi Green Energy Geothermal Development Co Ltd, aiming by 2020 to expand geothermal energy heating to at least 100 million square meters of housing in China.

Fu Chengyu, chairman of Sinopec, said that the compnay plan to build its joint venture into a world-class technology provider that integrates research, development and applications.