Select Committee on Science and Technology Written Evidence

Annex 2



  China and the EU already have an Action Plan on Clean Coal technologies and several Member States have bilateral activity with China in this area. We recognise that China's near term priority is to improve efficiency and reduce environmental impact of coal use, although we are aware of growing Chinese interest in CO2 capture and storage.

  This forms a centrepiece of the EU-China Partnership on Energy and Climate Security, announced at the EU-China Summit in September. In the declaration a new initiative on Near-zero Emissions Coal with CO2 Capture and Storage was proposed. The co-operation goals included the aim of developing and demonstrating in China and the EU advanced, near-zero emissions coal technology through carbon capture and storage by 2020.  This will address the challenge of increasing greenhouse gas emissions from the use of coal in China—and will provide impetus towards meeting the medium-term goals of the Partnership.

  By 2030, China's CO2 emissions from coal use will double to more than 5000 Mt CO2/year, exceeding total European emissions. This is significant in the context of stabilisation of atmospheric CO2 and mitigating global climate change. It will be vital to minimise emissions where coal is used. China is already improving the efficiency of new plant which is slowing the rate of emissions growth. CO2 capture and storage (CCS) offers the opportunity to reduce emissions per unit of electricity by 85—90%—"Near-zero Emissions Coal".

  Large scale deployment of CCS in China could significantly reduce future greenhouse gas emissions. The aim of the proposed collaboration is to bring forward the time when new coal plant in China might be built with CCS. It would build on planned European research and demonstration activity in this area and will facilitate technology transfer between EU industry and researchers, and their counterparts in China, opening market opportunities for Europe. The aim is to assess and demonstrate CCS in China in parallel with development and demonstration activity in the UK and Europe.

  At present there is limited activity on CCS in China although there is extensive expertise in clean coal technology and gasification. The viability and potential for large scale CCS in China is uncertain, as well as when and where it might be deployed and how it could be financed. While the country's geological storage capacity requires further assessment, there are many sedimentary basins that are expected to contain storage opportunities, including oilfields with enhanced oil recovery potential, enhanced coal bed methane and saline aquifer opportunities. There are a range of emissions sources where CO2 capture could be envisaged including power plants and other sources, and there are a range of capture technology options. We envisage an integrated assessment of CO2 capture and storage opportunities leading to a demonstration in China.

  We propose a collaborative approach that will be conducted through joint research and development between UK, European and Chinese partners, involving academic, research institute and industry partners. A three phased approach is envisaged leading towards a possible demonstration project starting up between 2010 and 2015.

  Usually there are a series of steps towards major capital projects such as a large demonstration project over a period of several years. These steps involve both technical, non-technical and financing activity, separated by major decision points. We propose a three phase approach, as summarised below.

Potential Cost

1.   Exploring the Options for Zero Emissions Coal (CCS) in China
Appraise and Select options for Demonstration
ca 3 Years  2006-2008
4.5 million
5-7.5 million
2.  Define a Demonstration Project
Define the Option (Engineering, Design and Finance)
ca 2 Years ? 2009-2010
7.5-15 million
3.  Construct a Demonstration Project
Construction stage
3-4 years, ? 2010-2014
35-750 million
[Depending on Option]

  Establishing a collaboration in this area would address a number of major issues necessary to address climate change, including:

    —  meeting China's growing energy demand whilst reducing the impact of coal on the global climate;

    —  demonstrating the UK and EU's commitment to technology transfer of climate related technologies

—  providing a significant opportunity for UK and EU industry, placing it in a much stronger position to compete with US clean coal technology industry.

Phase 1

  To demonstrate its commitment to the Partnership, and strong support for this initiative, the UK (DEFRA/DTI) is proposing to substantially fund Phase 1 of this project, working with other Partners as appropriate. We propose that Phase 1 could involve:

    —  Assessing the viability of Zero Emissions Coal and Carbon Capture and Storage as a GHG Mitigation Option in China (technical and economic potential and mapping within the context of China's energy/coal plans and projected emissions)

    —  Screening and identifying opportunities for demonstration and early deployment of CCS in China (including Enhanced Oil Recovery/Coal Bed Methane, "capture-ready" Plant and options for full scale demonstration).

    —  Identifying Opportunities for demonstration and deployment of CCS in China

    —  Reviewing Financing Options for Demonstration and Deployment and evaluating non-technical issues

    —  Building capacity and awareness of CCS in China

  It is anticipated that the Phase 1 duration will be 3 years. A budget of

4.5-7.5 million is envisaged.

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Prepared 9 February 2006