CHINESE MINISTRY UNDERSCORES PLANS FOR CCUS PILOTS, DEMOS

Tamar Hallerman
GHG Monitor
5/17/13

One of China’s most powerful government ministries called for the wider promotion and deployment of carbon capture, utilization and storage pilot and demonstration projects across government agencies in a new policy statement publicly released this week. China’s National Development and Reform Commission (NDRC), the government ministry that spearheads most national planning, underscored the importance of CCUS technology as a climate change mitigation tool and said it would lead government agencies to promote the technology for both the power and industrial sectors. “NDRC will collaborate with other ministries to promote strategic planning, regulation, project calls, public perception, capacity building and international collaboration in CCUS pilot and demonstration,” the NDRC said according to a translated version of the paper provided to GHG Monitor by the Global CCS Institute.

The statement, which one source says was finalized late last month but was publicly released this week, calls on other government departments to “strengthen support and guidance for CCUS pilot and demonstration” around China. In the immediate term, the NDRC called on government ministries to develop CCUS pilots and demos by encouraging new integrated projects, especially from high-emitting sectors like coal-to-chemical and steel and cement-making. The statement says agencies can do that by establishing financial incentives and regulations to promote projects such as credits, tariffs and land supports.

On the sequestration front, the NDRC called on agencies to “strengthen the management of natural CO2 fields” for promoting utilization methods to improve the economics of CCS projects. It also called for more work on CO2 storage assessments, source to sink matching programs and enhanced oil and gas recovery pilots. The document is also notable for the fact that it emphasizes capacity building and international collaboration activities, such as training CCUS professionals and “strengthen[ing] knowledge sharing and public perception of CCUS technologies,” while also building up work with other governments and institutions.

‘Significant Value’

The translated version of the policy statement reflects a Chinese government that is more willing to publicly admit the environmental impact of its massive coal fleet—the world’s largest—as well as some desire to clean it up and become a world leader in the development of CCS technologies.  “Developing CCUS is an effective measure to control greenhouse gas emissions in China, given that the Chinese energy system is dominated by coal, and will contribute to decarbonizing coal, oil and other energy intensive sectors,” the NDRC says in the statement. “CCUS will promote the transition and upgrading of high emission industries such as electricity, coal chemical and at the same time encourage the development other associated industries. It has significant value to Chinese medium and long-term plans to combat climate change and promote low carbon development.”

NDRC’s policy statement supplements much of the language used in the Chinese government’s most recent Five-Year Plan. Released in late 2011 and extending in scope through to 2015, that document calls for reducing carbon intensity by 17 percent and flagged CCUS as a priority technology for further development, particularly for thermal power, coal-to-chemicals and industrial sectors like steel and cement.

China has in recent years significantly upped its activities in cleaning up its power sector. The government began gradually rolling out cap-and-trade pilot programs in several of its major provinces and cities in January, and rumors circulated the following month that indicated officials were considering a targeted carbon tax for some industries. However, government officials eventually backed away from those rumors.

China, though, has rapidly increased its trajectory as a CCS player over the last few years, as the Global CCS Institute pointed out in its most recent industry status report. The group said in October that China had in two years more than doubled its planned CCS projects to 11, most of which included an EOR component. “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 October 2012 report said. “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.”