REPORT HIGHLIGHTS CHINA’S GROWING INTEREST IN CCS

Tamar Hallerman
GHG Monitor
10/12/12

While the number of planned carbon capture and storage projects in various stages of development globally has largely stagnated over the last year, China’s role in the field has been notably on the rise, the Global CCS Institute said in its most recent status report released this week. The number of large-scale CCS projects under various stages of development globally has seen a net gain of one over the last 12 months to a grand total 75, the Institute said in the most recent update of its annual “Global Status of CCS” report. While eight large-scale projects were either cancelled or put on hold over the last year, nine new ventures have surfaced since fall 2011, according to the trade group, five of which are located in China.

The Institute said that the country has more than doubled its planned projects over the last two years to 11, rapidly overtaking Canada in terms of potential carbon capacity, though all of its projects there are still in relatively early stages of development. “China continues to take a systematic approach to the deployment of CCS, focusing on research and development followed by the roll out of pilot projects and demonstration projects,” the report says. “As evidenced by the growing number of planned [large-scale projects], government and industry recognize the importance of CCS for the country’s energy future.”

CCS Included in Most Recent Five-Year Plan

The Institute attributed the rapid rise in projects largely to CCS’ inclusion in the country’s most recent Five-Year Plan, which was introduced in 2011 and will stretch through 2015. That document calls for reducing carbon intensity by 17 percent and flagged CCS as a priority technology for further development. It spells out the country’s desire to develop fully-integrated CCS demonstration projects, especially those that incorporate enhanced oil recovery. A subsequent plan for coal industry development released by China’s National Development and Reform Commission earlier this spring further lays out the country’s planned support for CCS R&D.

The report pointed out that much like North America, EOR and the financial promise of CO2 utilization is driving the recent growth of CCS projects in China. All five of the new Chinese projects that have popped up over the last year, according to the report, have some sort of EOR component. In a conference call this week with reporters, Institute CEO Brad Page emphasized China’s rapid rise in the field. “China is the fastest-moving nation now on CCS,” he said. “China has moved very rapidly from right down at the bottom of our [survey] to now being number three in the world in terms of number of projects…the emphasis is clear from the top of the Chinese administration.”

China Moves Forward with International Cooperation

As part of its plan to build CCS projects on its own turf, China over the last several years has aimed to build multiple international partnerships to help learn the trade. In March, the country’s National Development and Reform Commission, the government body that creates and implements the country’s social and economic policies, signed a memorandum of understanding with the Global CCS Institute to help encourage more RD&D projects and knowledge sharing. Last month, China’s state-owned Export-Import Bank and Sinopec Group, an oil industry giant based in Beijing, signed an MOU with American developer Summit Power Group for the Texas Clean Energy Project in an investment that could be worth more than $1 billion if finalized. “[China’s interest the in Texas Clean Energy Project] could very well turn out to be a sign of things to come,” Page said. “It’s a very important development and it shows that China is committed to climate change issues, technology development and their energy security future. From that perspective, it is a most welcome development globally that China is taking CCS seriously.” China has also attracted investment from American companies such as GE, American Electric Power and Babcock & Wilcox for CCS projects and research in recent years. Alstom is helping develop a pair of EOR projects in China in a partnership with the state-owned China Datang Corporation as well.

The list of CCS projects in China released as part of the Institute’s report provides one of the most thorough looks at projects in China, where information is often hard to verify outside of state media reports. In August, Shenhua Group said that its CCS demonstration project in Inner Mongolia has already stored 40,000 tons of CO2. Likewise, China Huaneng Group said it is also moving forward on a CCS project of its own. “Quite pleasingly, in China we’re starting to see early signs of a policy renaissance,” Page said, adding that he expects to see the country’s commitment to the technology to continue. “I wouldn’t doubt for a moment the commitment of the Chinese administration to CCS. They are showing a level of interest and application that difficult to observe elsewhere in the world at the moment.”