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Scaling up Chinese CCUS
29/3/2023
News
China has made significant progress in carbon capture, use and storage (CCUS) technology development in recent years, designing and demonstrating a number of large-scale projects. A new report provides an overview of current CCUS policy and makes recommendations aimed at supporting the scale-up of CCUS in China.
The report from the Global CCS Institute (GCCSI), written in collaboration with Tsinghua University and the Administrative Centre for Agenda 21, notes that 2022 was a ‘great year’ for CCUS in China. Two years after the country announced its so-called 30/60 targets –hitting peak emissions by 2030 and carbon neutrality by 2060 – CCUS development was ‘finally put to high gear’. China currently has around 100 CCUS demonstration projects at various scales and at different phases, total national annual CO2 capture capacity has reached 4mn tonnes and annual injection capacity has increased to 2mn tonnes, according to the report.
The number of demonstration projects with a capture capacity of 100,000 t/y CO2 has reached more than 40; among them, 10+ projects have a capacity of 500,000 t/y CO2.
Sinopec’s Qilu-Shengli CCUS project is China’s first megatonne-scale integrated project, capturing CO2 from a petrochemical plant and using it for enhanced oil recovery (EOR) at the Shengli field. CNOOC has also launched its first offshore CO2 storage project and, last December, Huaneng started to construct what will be the country’s first 1.5mn-tonne-scale coal power CCUS project.
China’s CCUS projects are attracting international and private players. For example, CNOOC, Shell and ExxonMobil have begun to jointly explore the country’s first 10mn-tonne-scale CCUS hub in Daya Bay, Guangdong. Meanwhile, Xinjiang Guanghui, a Fortune 500 company, has undertaken a prefeasibility study for a 3mn t/y CCUS project close to Jungar Basin.
‘Policy signal is strong,’ says GCCSI. ‘To date, around 70 macro- or sectoral- policy documents that mentioned CCUS have been released since 2006, and more than 10 were issued in 2022. On top, sub-national governments have beefed up their position in CCUS, including Guangdong, Shandong, Sichuan and Shaanxi, indicating that CCUS is an integral part of their climate action plan.’
Another important development is that China has started to launch quantitative policy instruments to support CCUS development, like People’s Bank of China’s Carbon Reduction Facility (CERF) and Clean Coal Refinancing Loan. CERF enables financial institutes to offer low-cost loans to decarbonisation projects, such as renewables, energy conservation and CCUS, with a requirement of carbon reduction disclosure. Recently it was announced that some foreign financial institutions will also be allowed to participate in the programme, including Deutsche Bank China, Societe Generale China, and DBS Bank China.
However, despite progress on a number of fronts, ‘lack of a successful business model is still impeding scaling-up CCUS deployment nationwide’, notes the report. It recommends that China should ‘further develop a CCUS national strategy within its 30/60 targets, establish an internationally recognised regulatory and legal framework, explore incentive mechanisms, as well as deepen international cooperation and exchange, in the coming years’.
