Facing China's Coal Future - IEA

Facing China’s Coal Future: Prospects and Challenges for CCS © OECD/IEA 2011
Technology Mechanism, would provide new opportunities for financing and incentives for CCS in
China.
The Durban Decision: a new window of opportunity for CCS
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Given the CCS potential in China and the technical work that has been done to date, China would
clearly benefit from international mechanisms facilitating CCS development such as the CDM, the
NAMA framework, the Green Climate Fund, and the Technology Mechanism. Based on cost data
for CCS in China, carbon offsets (either through the CDM or NAMAs) could potentially bridge a
much higher portion of the commercial cost gap in comparison to developed countries. Differing
from a CDM framework, NAMA support may take the form of building capacity, overcoming
financing barriers, reducing costs of implementing policies (e.g. feed‐in tariffs) and developing
and demonstrating advanced technologies like CCS that are not cost‐effective today. The Green
Climate Fund and the Technology Mechanism would support implementation of NAMAs and will
be critical in facilitating CCS development and deployment in China as well as other emerging
economies.
Will CCUS projects meet the objectives of CCS?
There is significant and expanding activity in the area of R&D into CCUS activities, with a growing
number of pilot projects currently underway to provide technical knowledge, training and further
research. Existing technical skills and experience with transport, EOR and other CCS‐related
industries give China a significant competitive advantage in developing demonstration projects.
China’s move towards CCUS is underpinned by some early experience with EOR and ECBM
projects; however, safety, storage permanence and long‐term monitoring will be critical from the
start, and doubts remain whether all such utilisation projects are going to meet the inherent
objectives of CCS as a climate‐change mitigation tool.
Determining the most efficient path for CCS technology development, while evaluating China’s
context, and understanding the importance of timely action to meet rapidly accelerating carbon
emissions is a near‐term priority.
Next steps
CCS development in China is critical for global GHG mitigation based on current scenarios. China
is already engaged in an ambitious effort on CCS research, development and demonstration. It
has the right conditions and political will to enhance these efforts provided that international
support and global climate policy also expand.
Box 6 Next Steps for R&D
Building on existing work, China may benefit further from directing resources to priority R&D
areas such as:
‐ Reducing efficiency penalty during capture;
‐ Assessing storage capacity;
‐ Assessing opportunities for CCS in industrial applications;
‐ Testing co‐benefits and costs of CCS‐EOR and CCS‐ECBM; and
‐ Implementing related pilot projects.