Insights and Commentaries

Insights and Commentaries

Insight: Institute Launched a China CCUS Progress Report

18th March 2023

2022 was a great year for Carbon Capture, Use and Storage (CCUS) in China. Two years after the country announced its 30/60 targets, CCUS development was finally put to high gear. Within twelve months, China has accomplished or started a great many firsts, such as the first integrated megaton-scale CCUS project, the first offshore CO2 storage project, the first 1.5-Mt-scale coal power CCUS project, the first capture project in glass-making industry. Given great international interest on China’s CCUS development, the Global CCS Institute (GCCSI), the Administrative Center of China’s Agenda 21 (ACCA21), and Tsinghua University jointly reviewed the status of CCUS in China, summarized key statistics, and put forward policy recommendations.

CCUS demonstrations have been happening at an unprecedented pace in China. As of now, there are around 100 CCUS demonstration projects with various scales and in different phases in the country. The total national annual CO2 capture capacity has reached 4 Mt and annual injection capacity has increased to 2 Mt. The number of demonstration projects with a capture capacity of 100 Ktpa CO2 has reached more than 40; among them, 10+ projects have a capacity of 500 Ktpa CO2. SINOPEC’s Qilu-Shengli CCUS project made China’s first megaton-scale integrated project, capturing CO2 from a petrochemical plant, and using for CO2-EOR. CNOOC has launched China’s first offshore CO2 storage project from its natural gas production process. Last December, Huaneng started to construct the country’s first 1.5-Mt-scale coal power CCUS project. This momentum also attracted international and private players.  CNOOC, Shell, and Exxon have begun to jointly explore China’s first 10-Mt-scale CCUS hub in Guangdong. Xinjiang Guanghui, a Fortune 500 company, has undertaken a prefeasibility study for a 3 Mtpa CCUS project close to Jungar Basin.

Policy signal is strong. 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 was that China started to launch quantitative policy instruments to support CCUS, 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 decarbonization projects, like 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 program, including Deutsche Bank China, Societe Generale China, and DBS Bank China.

Despite this progress on a number of fronts, lack of a successful business model is still impeding scaling-up CCUS deployment nationwide. To keep up this momentum, China should further develop a CCUS national strategy within its 30/60 targets, establish an internationally recognized regulatory and legal framework, explore incentive mechanisms, as well as deepen international cooperation and exchange, in the coming years. This English-version progress report is a reduced version of Chinese Version for the international audience. ACCA21 will release the Chinese version in the near future.

The full report can be downloaded here.

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