Business case for carbon capture utilization and storage in China within reach

With carbon prices at rock bottom, it may be surprising to hear that research conducted by ECN indicates that a business case for CCUS (carbon capture utilization and storage) in China is still within reach.

Mitigating CO₂ emissions, improving energy security, while preserving industrial competiveness is no easy feat. However ECN, with the Centre for Low Carbon Futures, The Chinese Academy of Sciences and consultancy firm Azure International have collaborated on a project to assess the potential of capturing CO₂ from non-power industrial installations in the Shaanxi province of China. The CO₂ can in turn be used to improve oil production in local oil fields whilst simultaneously trapping thousands of tonnes of CO₂ that would have otherwise be released into the atmosphere.

Sponsored by the British Embassy Beijing as part of the China Prosperity SPF Programme, the project has identified a number of possible carbon capture utilization and storage (CCUS) projects which combine low-cost industrial CO₂ capture and utilization of the CO₂ for enhanced oil recovery (EOR). If implemented in accordance with international best practice on site characterization and monitoring, between 90-95% of the CO₂ injected for EOR can be stored safely for geological timeframes.   

The third largest fossil fuel producing province in China, Shaanxi is an important refining and chemical production hub for the nation. The project team identified 22 high-purity (>95% CO₂) CO₂ sources within the methanol, ammonia, hydrogen and ethylene production industries, which together release almost 65MtCO₂ per year. Nine of these sources are within 150km of a suitable location for EOR, with the storage capacity in the region estimated at 200MtCO₂.

Tom Mikunda, who led the project for ECN,  explains: “two methanol plants were identified that each produce over 6Mt of high-purity CO₂ per year. Including the revenues of the incremental oil produced, these projects could be realised with costs as low as 5$ per tonne of CO₂.” Even with carbon prices at rock bottom, given policy support and a suitable regulatory framework, this initial research indicates that a business case for CCUS in China is still within reach”.

You can find the briefing paper here.   

The full report can be found here.

---