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CCS: Towards Market Transformation in China

23 July 2010
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CCS: Towards Market Transformation in China

The development of low-carbon technologies plays a vital role in the fight against global climate change. Carbon Capture and Storage (CCS), is one such technology that could be very effective in reducing carbon dioxide (CO2) emissions, particularly from the burning of fossil fuels to generate electricity.

CCS involves storing CO2 underground instead of it being released into the atmosphere. The CO2 is captured from power stations and other industrial installations and liquefied, and then channeled through pipelines into saline aquifers, coal beds or depleted gas and oil fields for indefinite isolation from the atmosphere. It is estimated that CCS can reduce the CO2 released from coal-fired power stations by up to ninety percent and therefore it could play a major role in reducing the climate impact of the power sector. However, the CCS process is complex and its acceptance widely debated, particularly because of its high cost.

Nevertheless, CCS is gaining more support because of the scale of the reduction of carbon dioxide emissions that it provides and also because of its potential long-term cost effectiveness when compared to other options for decarbonising the power sector.

In this briefing paper, drawn from the Chinese report, CCS: Towards Market Transformation in China, The Climate Group examines different CCS implementation strategies, with a particular focus on China. We discuss current policies, regulation and financing, within China and also internationally. In the preparation of the report we interviewed a wide range of Chinese stakeholders, to gain an insight into the benefits and challenges of CCS.

We found that the growth of the CCS industry is dependent on several factors, including: the cost of the process, the demand for the technology, effective regulation and also private sector and local and international government support.

Key findings from the report include:

  • CCS could provide the most cost-effective path to large scale, long-term emission reductions.
  • CCS is an opportunity for China to gain a larger share in the global low-carbon technology market.
  • Integrating CCS with coal chemical engineering is potentially a unique aspect of China’s CCS development.

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