Facing China's Coal Future
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Facing China’s Coal Future Prospects and Challenges for Carbon Capture and Storage Dennis Best and Ellina Levina The views expressed in this working paper do not necessarily reflect the views or policy of the International Energy Agency (IEA) Secretariat or of its individual member countries. This paper is a work in progress and/or is produced in parallel with or contributing to other IEA work or formal publication; comments are welcome, directed to [email protected] © OECD/IEA, 2012 ©OECD/IEA 2012 INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA), an autonomous agency, was established in November 1974. Its primary mandate was – and is – two-fold: to promote energy security amongst its member countries through collective response to physical disruptions in oil supply, and provide authoritative research and analysis on ways to ensure reliable, affordable and clean energy for its 28 member countries and beyond. 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The European Commission The terms and conditions are available also participates in online at www.iea.org/about/copyright.asp the work of the IEA. © OECD/IEA 2012 Facing China’s Coal Future Prospects and Challenges for Carbon Capture and Storage Table of Contents Acknowledgements ........................................................................................................................... 3 Executive Summary ........................................................................................................................... 4 Page | 1 China’s Energy Demand and CO2 Emissions ...................................................................................... 7 Energy demand and continued reliance on coal ....................................................................... 7 China’s energy‐related CO2 emissions ....................................................................................... 9 Potential for CCS globally and in China ................................................................................... 11 Current CCS Development in China ................................................................................................. 15 China’s CCS policies and institutions ....................................................................................... 15 Key institutions, sectors and players ....................................................................................... 18 National R&D programmes...................................................................................................... 20 R&D trends and CCUS .............................................................................................................. 21 CCS Demonstration Projects ........................................................................................................... 26 Capture projects ...................................................................................................................... 27 Projects focusing on CO2 utilisation and storage .................................................................... 29 Options for Financing CCS in China ................................................................................................. 31 Financial rationale and needs .................................................................................................. 31 Financing sources and schemes .............................................................................................. 32 Possible mechanisms for the future ........................................................................................ 40 Stakeholder Perceptions of CCS Options in China .......................................................................... 44 Introduction and views on role of CCS .................................................................................... 44 Survey key findings .................................................................................................................. 45 Conclusions and Implications for the Future .................................................................................. 50 China’s current strategy and drivers for CCS ........................................................................... 50 Challenges for the future ......................................................................................................... 52 Next steps ................................................................................................................................ 54 Abbreviations, acronyms and units of measure.............................................................................. 56 References ....................................................................................................................................... 59 List of figures Figure 1 World Energy Outlook New Policies Scenario primary energy demand until 2035 ............ 7 Figure 2 New Policies Scenario, Coal demand in China by sector, 2000‐35 ..................................... 8 Figure 3 Energy‐related CO2 emissions by region, 2008‐2010 .......................................................... 9 Figure 4 Regional distributions of CO2 emissions and sources from coal combustion 2009 .......... 10 Figure 5 Key technologies for reducing global CO2 emissions ........................................................ 11 Figure 6 CCS deployment pathway as estimated in 2009 IEA Technology Roadmap ..................... 12 Figure 7 Chinese government institutions involved in energy policy and administration .............. 17 Facing China’s Coal Future: Prospects and Challenges for CCS © OECD/IEA 2011 Figure 8 Typical process flowsheet of standard coal chemical industry in China ........................... 22 Figure 9 CO2 emissions of fuels including coal chemical products w/ and w/out CCS ................... 23 Figure 10 CO2 utilisation by classification of application ................................................................ 24 Figure 11 CO2 injection for EOR ....................................................................................................... 25 Figure 12 The commercial gap for CCS technologies ...................................................................... 32 Page | 2 Figure 13 Stakeholder ranking of key factors for CCS development in China ................................. 45 Figure 14 Stakeholder ranking on priorities for capture technology .............................................. 46 Figure 15 Stakeholder ranking on CO2 storage priorities and options to 2050 .............................. 47 Figure 16 Stakeholder views on industry readiness for CCS in China ............................................. 48 Figure 17 Stakeholder ranking on China’s near‐term CCS technical development priorities ......... 48 Figure 18 Stakeholder ranking on CCS policy priorities .................................................................. 49 Figure 19 Stakeholder views on barriers to cross‐sector co‐operation .......................................... 49 List of tables Table 1 Key climate and CCS policy actions in China ....................................................................... 15 Table 2 Key players active in China’s CCS development ................................................................. 18 Table 3 863 Programme planned IGCC and CTL demonstration plants .......................................... 20 Table 4 Capture projects in operation by 2011 ............................................................................... 27 Table 5 Capture projects under construction by 2011 .................................................................... 28 Table 6 Capture projects: Planned and in the pipeline ................................................................... 29 Table 7 Projects focusing on CO2 utilisation and storage ............................................................... 30 Table 8 Financial scenarios for IGCC and supercritical