The Impact of Climate Policy on Carbon Capture and Storage Deployment in China

Abstract

Carbon capture and storage (CCS) from coal combustion is widely viewed as an important approach for China’s carbon dioxide (CO2) emission mitigation, but the pace of its development is still fairly slow. In addition to the technological and economic uncertainties of CCS, lack of strong policy incentive is another main reason for the wide gap between early expectations and the actual progress towards its demonstration and commercialization. China’s mitigation scenario and targets are crucial to long-term development of CCS. In this research, impacts of CCS on energy and CO2 emissions are evaluated under two mitigation scenarios reflecting different policy effort levels for China using the China-in-Global Energy Model (C-GEM). Results indicate that with CCS applications in the power sector China can achieve an added emissions reduction of 0.3 to 0.6 Gigatons CO2 (GtCO2) in 2050 at the same level of carbon taxes respectively in the two mitigation scenarios. Under the more ambitious mitigation scenario, approximately 56% of China’s fossil fuel fired power plants will have CCS installed, and CO2 emission amounting to 1.4 GtCO2 will be captured in 2050. A carbon price not lower than $35/tCO2 appears to be necessary for the large-scale application of CCS in the power sector, indicating the vital role of policy in the deployment of CCS in China’s power sector.