Climate Special 16: Emission to Earth

Today, we continue our series on China-US climate cooperation and look at how the world’s two largest emitters are including carbon capture and storage in their overall strategy to combat climate change. But will their decade-long cooperation unlock solutions or spark new controversies?

Transcript

Emission to Earth 

Today, we continue our series on China-US climate cooperation and look at how the world’s two largest emitters are including carbon capture and storage in their overall strategy to combat climate change. But will their decade-long cooperation unlock solutions or spark new controversies?

Chinese State-run oil and gas conglomerate Sinopec plans to establish a technology innovation hub for carbon capture technology with Saudi Basic Industries Corporation and Kazakhstan National Oil. 

Speaking at the inaugural Yabuli Annual Conference on Sustainable Development during the UN Climate Change Conference in Baku, Azerbaijan (COP29) on November 12, 2024, Sinopec Chairman Ma Yongshen revealed China’s planned open-access, mega-scale project featuring the artificial CO2 mitigation technology carbon capture, usage and storage (or CCUS).

This initiative, jointly explored with European partners such as Shell and BASF, was formalized through a non-binding Memorandum of Understanding signed in November 2022.

Similar joint projects involving China’s energy giants and international partners have been launched in recent years. In June 2022, a mega-scale offshore CCUS cluster in the Guangdong-Hong Kong-Macao Greater Bay Area was mapped out by China National Offshore Oil, ExxonMobil, Shell and the Guangdong Provincial Development and Reform Commission. This project, with an annual storage capacity of 10 million tons of CO2 beneath the sea near the Pearl River estuary, is slated as a demonstration site, providing valuable data and insights for international collaboration, according to a report by Southcn.com following the signing ceremony.

China’s international cooperation on CCUS, particularly with the US, dates back to 2009 with the establishment of the China-US Clean Energy Research Center (or CERC).

On November 15, 2023, Beijing and Washington issued the Sunnylands Statement on Enhancing Cooperation to Address the Climate Crisis, reaffirming their shared commitment to addressing climate change. The statement included plans to develop at least five large-scale CCUS projects in each country by 2030.

Chevron launched the world’s first large-scale carbon capture project in 1972 at the Kelly-Snyder Oil Field in West Texas. By July 2023, there were 392 CCUS projects globally with a combined CO2 capture capacity of 361 million tons annually. These figures were reported by the Global CCS Institute, an international think tank specializing in carbon capture and storage (or CCS), in its 2023 Global Status of CCS Report published on November 9, 2023.

CCUS works by capturing CO2 emissions from fossil fuel combustion and heavy industrial processes through absorption, combustion or membrane separation. The captured CO2 is transported by pipeline or vessels, and can then be used or stored underground, either onshore or offshore.

While some experts, such as Italian physicist and Nobel laureate Carlo Rubbia, have raised concerns about the technology’s effectiveness and safety, many scientists remain optimistic about its vital role in achieving carbon neutrality.

Smoke vs Substance

China and the US announced plans to launch joint research and development initiatives to advance CCUS technologies during a high-level dialogue in Beijing held from April 25 to 26, 2024. Guided by the Sunnylands Statement, the meeting highlighted opportunities to address pressing climate challenges that require deeper cooperation, according to the global nonprofit World Resources Institute, which disclosed details on July 10, 2024.

The Global Carbon Budget 2024, a report led by the University of Exeter in the UK and released during COP29 in Baku on November 13, 2024, projected global CO2 emissions would reach a record 41.6 billion tons in 2024, a nearly 2.5 percent year-on-year increase. Of these emissions, 37.4 billion tons were attributed to fossil fuel use, reflecting 0.8 percent growth compared to the previous year.

Despite record levels of clean energy coming online in 2023, fossil fuels continued to meet two-thirds of the overall increase in global energy demand, according to the International Energy Agency in its World Energy Outlook 2024 published in October 2024.

With China targeting peak carbon emissions by 2030 and carbon neutrality by 2060, and the US aiming for carbon neutrality by 2050, decarbonizing fossil fuels and heavy industry has become essential.

Zhang Xian, director of the Global Environment Division at the Administrative Center for China’s Agenda 21, a public institute affiliated with the National Natural Science Foundation, told NewsChina that “Without CCUS technology, achieving carbon neutrality – especially offsetting emissions from steel and cement plants – could double the cost.”

China and the US began collaborating on CCUS projects in 2009. One example is a Memorandum of Understanding signed between US-based Duke Energy and State-owned China Huaneng Group. Both companies agreed to share knowledge on clean energy technologies, including carbon capture and storage, to reduce greenhouse gas emissions, according to China Huaneng’s statement on August 10, 2009.

The same year, China Huaneng developed a facility capable of capturing 120,000 tons of CO2 annually from the 1,320-megawatt Shidongkou First Power Plant, a coal-fired plant in Shanghai.

Three years later, in 2012, the two companies expanded their research cooperation through CERC. Under a three-year agreement, they conducted an engineering study to explore the feasibility of implementing China Huaneng’s low-cost carbon capture technology at one of Duke Energy’s Gibson Station units in Indiana, according to a Duke Energy press release.

Between 2009 and 2020, CCUS collaborations extended beyond power plants to academic institutions. China Huaneng and Duke Energy partnered with Lawrence Livermore National Laboratory in California, West Virginia University and the University of Wyoming in the US to identify suitable CO2 sequestration sites, including the Ordos Basin in Northwest China and the Rock Springs Uplift in Wyoming, according to a World Resources Institute report released on March 28, 2016.

Other collaborations included a CO2-enhanced oil recovery project between Yanchang Petroleum in Northwest China’s Shaanxi Province and the University of Wyoming, which involved injecting captured emissions into oil reservoirs. From 2012 to 2019, the State Key Laboratory of Coal Combustion at Huazhong University of Science and Technology (or HUST) in Wuhan, Hubei Province, worked with US institutions such as West Virginia University and the US National Energy Technology Laboratory to advance CCUS research and technological upgrades.

However, this momentum stalled between 2020 and 2022 due to the pandemic and escalating geopolitical tensions. When asked about the hiatus in CCUS cooperation, organizations such as China Huaneng, HUST and West Virginia University declined to comment to NewsChina.

By November 2024, the depth of collaboration between the two nations had not yet returned to levels seen a decade ago. Liang Xi, secretary-general of the UKChina (Guangdong) CCUS Center and a professor of sustainable transitions at University College London, told NewsChina in November 2024, “The cooperation remains in discussion rather than concrete actions [being taken].”

Nevertheless, the Sunnylands Statement signaled a renewed commitment to decarbonization from the two major energy-consuming countries. Liang added, “CCUS, particularly when integrated with biomass and renewable energy, is essential for reducing the substantial emissions that remain challenging to mitigate as we aim for carbon neutrality.”

Fuel for Debate

In March 2024, a liquid CO2 leak estimated at roughly 8,000 metric tons from a storage facility 1,500 meters underground in the US state of Illinois raised concerns over the safety of CCUS projects. The incident reignited criticism of the technology, as experts sounded the alarm over potential impacts to drinking water supplies. The US Environmental Protection Agency alleged that agribusiness giant ADM, which oversees the project, had violated a slate of federal regulations after the leak migrated to “unauthorized zones,” according to the Chicago Sun-Times.

A statement from the Illinois Clean Jobs Coalition, a group of labor organizations and environmental advocates, said on September 13, 2024, “There are significant risks at every step of the [carbon capture and storage] process, and it’s not a matter of if carbon sequestration facilities leak, but rather when.”

Safety concerns surrounding CCUS are not new. In 2009, Nobel-winning physicist Rubbia warned about the potential risks during a forum on energy saving, restructuring and financing hosted in China. He described CCUS projects as costly to construct, inefficient in power generation and prone to lethal CO2 leaks at concentrations exceeding 10 percent, according to a report from Xinhua News Agency.

However, many experts argue that safety concerns should not hinder CCUS development. “Not all CO2 sequestration is artificial – some occurs naturally in geological formations. Over centuries, how many CO2 leaks have jeopardized human society?” said Zhang with Administrative Center for China’s Agenda 21. Zhang compared the Illinois incident to a traffic accident: a regrettable occurrence that should be avoided but not exaggerated. “By adhering to strict safety standards such as avoiding sites prone to earthquakes, installing proper valves and fulfilling monitoring responsibilities, the technology can be made safe,” Zhang said.

He Bingguang, chief policy expert at the China Association of Circular Economy, reinforced this view in a July 2023 interview with state-run China Central Television. Mr. He said, “Unless humanity ceases using plastics, chemicals and construction materials, CCUS remains the most effective and stable technology for achieving carbon neutrality.”

China’s reliance on fossil fuels, with coal and petroleum accounting for around 70 percent of energy consumption in 2023, bolsters the necessity of CCUS. According to the National Bureau of Statistics, this figure is expected to drop to 10-15 percent by 2050 under ongoing mitigation efforts. A paper led by Gao Xiang, an academician with the Chinese Academy of Engineering, published in Frontiers of Environmental Science and Engineering in March 2024, confirmed that negative carbon technologies like CCUS are indispensable for achieving carbon neutrality while traditional energy sources remain in use.

A synthesis report jointly released by Tsinghua and Harvard universities in May 2024, titled China-US Deep Decarbonization Technology Innovation and Policy, projected that China would need to capture from 1-2.5 billion tons of CO2 annually by 2060 to meet its carbon neutrality goals. Current carbon capture capacity, however, accounts for only 0.16-4 percent of this demand. The report also highlighted China’s lag in CCUS technology and infrastructure compared to the US. While CCUS development in China remains at the industrial demonstration stage, with million-ton-scale demonstration projects already in operation and aligning with international standards, the deployment of large-scale operational projects still lags behind that of the US, where it is already operating commercially.

Expert Zhang attributed this disparity not to technological gaps but to differing timelines for carbon neutrality – the US targets 2050, while China’s goal is set for 2060. “In the US, policies like the Inflation Reduction Act accelerated emissions reductions to meet clean electricity goals within a decade. In China, CCUS infrastructure will expand at a large scale between 2030 and 2035 to meet absolute reduction targets,” Zhang said. He emphasized the need for China to establish a standardized system for registration, monitoring and supervision to regulate the industry.

Liang with the UK-China (Guangdong) CCUS Center pointed out that China’s CCUS development suffers from a lack of stimulus policies and regulatory institutions. He said, “Without policy incentives, it’s difficult to define, monitor and audit participants’ rights and duties. Inadequate supervision over emissions volumes and densities keeps carbon prices below standard levels, impeding the commercialization of CCUS technology.”

According to the UK-China (Guangdong) CCUS Center, the global average cost of carbon capture varies by industry: it’s US$10-91 per ton for the petrochemical sector, US$40-120 per ton for steel, and US$50-117 per ton for power plants. In China, initial investment for CCUS projects is typically estimated at 250-350 yuan per ton (or US$34-48 per ton). Yet, the average carbon price in China’s National Carbon Market hovered between 46 and less than 100 yuan (US$6-14) per ton from 2022 to 2024, according to data released by the Yicai Research Institute and international Institute of Green Finance, Central University of Finance and Economics.

Liang said, “Only when China’s carbon emission permit and pricing systems mature will enterprises identify the most cost-effective ways to reduce emissions. CCUS will likely become a major solution for emissions reductions in the steel, cement and chemical industries.”

Well, that’s the end of our podcast. Our theme music is by the famous film score composer Roc Chen. We want to thank our writer Wu Jin, translator Du Guodong, and copy editor Pu Ren. And thank you for listening! We hope you enjoyed it, and if you did, please tell a friend so they too can understand The Context.