Carbon Capture & Sequestration in China: Ripe for the Picking

It's the Year of the Ox. And the Ox likes low-hanging fruit. On Friday last week NRDC released the Executive Summary of a report that examines the potential for near-term Carbon Capture & Sequestration opportunities in China. The full report will be released over the coming few weeks.

Why CCS? Why China? My colleague and co-author, Jingjing Qian, covers this and much more in her recent blog. Here, I draw on her and the report's conclusions, and examine the implications.

In short, when life deals you lemons, make lemonade. China is likely the world's largest emitter of carbon dioxide (CO2), and heavily reliant on fossil fuels. Even under the most aggressive, plausible scenarios of green and energy efficient development, fossil fuels (coal, in particular) still play far too large a role for us to breathe a sigh of relief when it comes to global warming. We need to reduce emissions from fossil fuels, and fast. CCS offers such an option.

Can CCS work in China? The answer seems to be a resounding "yes", for a number of reasons. The price tag for projects will be cheaper in China, due to lower labor, material and fuel costs. There are numerous large point sources where CO2 could be captured, in many cases cheaply (because of their high concentration). China's geology is conducive to sequestering this CO2 geologically, and could accommodate centuries worth of emissions on first examination. Transporting the CO2 from source to sink is far easier than in other parts of the world, since there is very good geographical matching between the two in many cases. The Chinese have made very encouraging moves, both in terms of developing proprietary CCS technology and in terms of pioneering projects within China's boundaries that either incorporate or lend themselves to CCS. China's policy and regulatory framework could be expanded to encompass CCS. Some, or many, of these factors cannot be found in several other parts of the world, making China a special opportunity when it comes to CCS.

Will CCS be taken up spontaneously in China, then? The answer is no. Without international involvement, China by itself is very unlikely to deploy this technology on any significant scale. The first missing component is funding. The second is technological expertise and knowledge transfer. And the third is a domestic policy and regulatory framework. Developed countries and corporations can fill these gaps.

The funding gap is relevant to the Major Economies Forum, to the global climate accord being sought in Copenhagen in December, and to a potential bilateral technology agreement between China and the U.S.. CCS is likely to be part of agreements that come out of all three forums, and has strong potential to pave the way for agreement on a broader climate deal between the two countries.

The technological know-how and expertise gap, (e.g. in areas such as reservoir engineering, CO2 pipeline construction and operation, subsurface modelling and monitoring) can be bridged most productively if Chinese and Western scientists, engineers and practicioners collaborate hands-on in the context of specific pilot projects.

The policy and regulatory gap is one that China will need to address itself, but related experiences from other countries' governments and regulators can prove invaluable. China does things its own way in the end, but its officials certainly look for ideas abroad.

Where to, from here? China's low-hanging fruit CCS opportunities are ripe for the picking. For a modest sum ($100M), the U.S. could help set up quickly 4-5 CCS pilot projects using high purity CO2 streams, spanning five years or so each, that could be pioneering on many fronts: knowledge and technology transfer and building, better geologic characterization of China's key sedimentary basins, and relationship building between the two heavyweights across the Pacific. The Major Economies Forum, and nations in Copenhagen in December, could then cement a deal that includes funding for a certain CCS capacity, arrangements for technology and knowledge transfer, as well as institutional exchange.

Next year is the Year of the Tiger - time for bold action. Lemonade, anyone?