Facing China's Coal Future - IEA

© OECD/IEA 2012 Facing China’s Coal Future
Prospects and Challenges for Carbon Capture and Storage
Engagement with the private sector for successful demonstration is fundamental for CCS to be
deployed. China’s investments, as well as other national CCS projects in CCS RD&D should be
optimised by involving and leveraging private sector resources across the industrial and resource
development chain to ensure the success of demonstration projects. The explicit design of
Chinese programmes to encourage or even require private sector resources, led by state‐owned
institutions, such as in the case the GreenGen project, is an important step in leveraging private
resources. Policy mandates and clear guidelines to industry are necessary.
Page | 53
Storage capacity
Large uncertainties remain pertaining to viability of long‐term storage of CO 2 in China’s geological
structures. Geological storage conditions in relation to site‐specific cost analysis need to be
addressed to further clarify China’s storage capacity and China’s overall potential CCS
contribution to total global emissions reduction. International co‐operation programmes are
currently working to develop information and data to facilitate storage estimates, but access to
detailed and reliable data in these areas is still an obstacle. One of the arguments for EOR and
ECBM development in China may be that this could help to clarify storage information and
resource capacity estimates. Related learning and availability of data will be key to any CCUS
approach that China pursues, in order to ensure that long‐term storage is prioritised, rather than
pursued as an end to fossil fuel extraction and promotion of energy security itself.
International co‐operation and knowledge sharing
China provides a low‐cost venue for conducting research and development that has already
attracted foreign investors and joint ventures in technology development and research. These
programmes are continuing and are likely to expand at national, provincial, and industry levels.
Strengthening laws to protect intellectual property (IP), jointly developed by foreign and Chinese
ventures, would further enhance China’s potential to attract foreign investment in research
collaboration in related fields. Programmes such as the US‐China Clean Energy Research Center
have provided clear outlines of how future projects will be developed to maximise the exchange
of information from these public‐private and international partnerships. Several international
co‐operative initiatives, development banks and international institutions have sought to develop
capacity‐building and knowledge‐sharing initiatives, including networks, fora, workshops, joint
research programmes and collaborative technology‐development programmes. The CERC, NZEC
and related research programmes have made significant inroads in clarifying and developing best
practices in these areas, and future multilateral and bilateral projects should consider the
importance of these agreements from the outset.
Future options for financing CCS
Given inadequate economic incentives for CCS projects in China, additional mechanisms would
be required for deployment of CCS. Carbon trading through an emissions trading system will
likely constitute a major financing platform for GHG emissions reduction. In 2013, China is
planning to launch a domestic carbon market to help meet its carbon intensity targets of ‐
40% to ‐ 45% by 2020 compared with 2005 levels and a 17% reduction over the 2011‐15 period.
This could provide incentives and generate revenues for CCS technology deployment. New
international instruments recently adopted by the UNFCCC decisions in Durban (such as CCS in
the CDM, the NAMA framework and the Green Climate Fund created to support mitigation
actions in developing countries) along with adaptation and technology transfer as well as the