While it is evident that China needs and has the necessary technical capability – and sufficient storage capacity – to carry out carbon capture and storage, significant barriers exist for its wide and timely deployment. The most important of these are the high capital costs and the considerable amount of energy currently required for carbon capture. These two barriers are interrelated; cutting the energy penalty will reduce the total cost of CCS.
Currently, the energy penalty for a new post-combustion coal power plant can be as high as 31% and, for a new integrated gasification combined cycle (IGCC) plant, 16%, as explained by Edward Rubin of Carnegie Mellon University. In China, the addition of CCS will require the burning of roughly 25% more coal in order to generate the same quantity of electricity. This is a steep initial price for the first CCS plants, which is nonetheless widely expected to come down subsequently. In addition, it is important to remember that in meeting carbon-reduction targets will rely first and foremost on improving energy efficiency and utilising renewable energy and other lower-cost opportunities, only using CCS deployment to supplement these efforts.
Technological progress has the potential to slash the energy penalty, and many research-and-development efforts are underway inside and outside China aimed at fashioning more efficient and cheaper capture processes. Based on the historical cost trends of other emerging energy technologies such as wind and solar power, there is reason to be optimistic. Solar photovoltaics, windmills and gas turbines have undergone constant cost reductions as installed capacities have increased. For this reason, research-and-development and large-scale demonstration projects will all help lower CCS costs.
International expertise is stronger than that of China in three technical areas: subsurface geological engineering; long-term monitoring and verification; and long-distance carbon dioxide transportation infrastructure. Given the United States’ extensive carbon dioxide-enhanced oil recovery (EOR) experience – the world’s first such project was launched in the southern state of Texas nearly four decades ago – the United States is well-positioned to play an important role in developing CCS in China.
International collaboration may also take place in joint technology research and development, such as the US-China Clean Energy Research Center that was announced during US president Barack Obama’s visit to China late last year. China has already begun its own CCS research, with notable work conducted by Tsinghua University, Zhejiang University, several institutes in the Chinese Academy of Sciences and research institutes of China National Petroleum Corporation and the Huaneng Group. Chinese companies, such as the Huaneng Group and the ENN Group, have developed proprietary coal gasification technologies and are already collaborating with Australia and the United States.
The international community could also provide recommendations to China on developing a regulatory system to ensure the safety and effectiveness of CCS projects. It is crucial that the initial demonstration projects are conducted properly in terms of site characterisation, risk assessment, environmental-impact assessment and ongoing operations, because sub-standard work at the beginning could call the technology as a whole into question and slow down its deployment.
Since China does not yet have a comprehensive regulatory system in this area, early demonstration projects will, in particular, need to learn from the experience and best practice that industrialised countries are developing. The European Union and the United States have already launched efforts to share their regulatory experiences with China. This is also an area where international non-governmental organisations (NGOs) can make a substantial contribution, exemplified by the collaboration between the World Resources Institute and Tsinghua University.
But knowledge-sharing alone is not enough. Increased funding is also needed to jump-start a CCS industry in China. The first few large-scale demonstration projects will be intrinsically expensive and “risky” for any single developer and there is still widespread public concern in China about the technology. Therefore, international funding will be critical in helping to initiate a number of demonstration projects that experiment with different capture technologies and geological formations and benefit all parties involved technically, politically and economically in a carbon-constrained world.
More substantial funding from both the Chinese government and international sources is essential to the deployment and improvement of CCS technologies, and thus reduction of the costs involved. Three main areas are in need of major financial support. The first is large, integrated projects to test commercial-scale technologies, gain experience, identify regulatory issues, and train human resources. The second is research into offshore basins for carbon sequestration to meet the storage needs of China’s heavily industrialised eastern and southern coastal regions, which lack sufficient onshore storage capacity. And the third is detailed, subsurface geological assessments of China’s major onshore sedimentary basins to refine current methodologies and produce more accurate estimates. To develop a CCS industry in China that is also capable of exporting technology and expertise, further policy and economic drivers are needed, such as direct regulation, carbon taxes and emissions-control subsidies.
China will need a wide portfolio of mitigation measures, including CCS, to reduce its carbon footprint. There are many “low-hanging fruit” opportunities that exist for CCS in China, but whether these opportunities are grasped will depend on the extent to which governments, international institutions and corporations engage in meaningful and prompt financing, capacity building and technology and knowledge transfer. This collaboration will not only benefit China but will also be of value to cooperating countries and, ultimately, the wider world.
An earlier version of this article was published by the Natural Resources Defense Council, as “Identifying near-term opportunities for carbon capture and sequestration (CCS) in China”. It is a summary of a full report, co-authored by Jingjing Qian, George Peridas, Jason Chen and Yueming Qiu, Julio Friedmann, Xiaochun Li, Ning Wei, S Ming Sung, Mike Fowler, Deborah Seligsohn, Yue Liu, Sarah Forbes, Dongjie Zhang and Lifeng Zhao.
Homepage image from US Department of Energy’s Office of Fossil Energy