The Challenges of Carbon Capture and Storage (CCS) Development in China: A Comparative Analysis of Three CCS Demonstration Cases in Europe, U.S., and China

As a significant mitigation strategy to fight climate change, Carbon Capture & Storage (CCS) demonstration projects have received huge amount of public funding across the world. After examining three large scale integrated CCS coal-fired power demonstration projects, which are carried out by America, Europe and China, this paper presents three different approaches that three authorities are taking to support the adventure of CCS technology. By comparing these three cases, the paper demonstrates there exist some significant challenges in CCS development in China and offer relevant policy recommendations to cope with the challenges. DOI: 10.4018/jal.2012070102 16 International Journal of Applied Logistics, 3(3), 15-21, July-September 2012 Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. CtL are two major large scale integrated CCS demonstration projects. GreenGen is large scale integrated CCS project applying Integrated Gasification Combined Cycle(IGCC) technology. Shenhua CtL is a direct coal liquefaction project. Both Europe and U.S. are powerhouses of CCS development. The majority of large scale integrated CCS coal-fired power projects are undertaken by American and European companies. In 2008, the G8 countries planned to put billions of public money to support 20 large-scale CCS demonstration projects by 2010 (E3G,2009). In Europe, the U.K. and Netherland are pioneers of developing large scale integrated CCS coal-fired power projects. Under the European Energy Programme for Recovery(EEPR), the European Council have spent €1 billion to support six large scale integrated CCS demonstration projects, which apply different combustion and capture methods to demonstrate commercial-scale CCS projects. To provide funding for more CCS projects, the European Commission has developed a new mechanism, NER300 Program2, which is schemed to raise €4.5-5 billion from European carbon market to finance large scale CCS demonstration projects in the next decade in member states. There have been 13 large scale integrated CCS projects applying for the funding. As the reward decision will not be taken by 2012, this paper is to analyze Compostilla Oxy CFB 300, a project under EEPR scheme. The United States has the largest number of large scale integrated CCS projects. By November 2008, there are 11 large scale integrated CCS coal-fired power projects with storage of no less than 1 million tonnes of carbon dioxide a year (Rai et al., 2008). The Obama Administration has committed to 5 plus commercial-scale CCS projects construction by 2016. The world’s first near-zero emissions coal-fired power project with CCS, FutureGen 2.0, is the only demonstration project with dominant funding from U.S. federal government. The project in Illinois receives $1 billion from the Department of Energy (76.9%) and $0.3 billion from private companies (23.1%). The $1.3 billion clean coal project is expected to help American coal industry to become a global leader in CCS and advanced oxy-combustion technology in future carbon constricted world economy. By comparing three large scale integrated CCS coal-fired power projects, FutureGen 2.0 of the United States, Compostilla Oxy CFB 300 of Europe, and GreenGen of China, this paper is to analyze major challenges of CCS development in China and provides policy recommendations. 2. COMPARISON OF THREE CASES Through Table 1 a brief contrast of three CCS demonstration projects is provided. The comparison relates to various aspects of project, from technical profile to project timetable, social benefits and policy model. 2.1. Policy Model Determines Project Outcome In the model of policy and financal support, China’s GreenGen project is less efficient and effective than the other two. As the Row 14 of Table 1 shows, the three leading economies have taken very different models of raising money and managing projects in the CCS demonstration projects. In U.S. FutureGen 2.0 project, a public-private partnership approach is taken to cope with the risk3. Moreover, a non-profit structure, the FutureGen Alliance, makes all activities related to CCS technology development and demonstration projects transparent and checkable. It is assumed that technical achievements from the demonstration project would benefit the coal power industry as a whole. In European Compostilla Oxy CFB 300, the European Commission sets up two important funding application mechanisms for CCS technology development, EEPR and NER300, to create a competitive platform for companies and member states to work together and compete each other. This is a cost-effective institutional arrangement. As the confrontations between developers and local communities have taken place in some European and American CCS 5 more pages are available in the full version of this document, which may be purchased using the "Add to Cart" button on the product's webpage: www.igi-global.com/article/challenges-carbon-capturestorage-ccs/70589?camid=4v1 This title is available in InfoSci-Journals, InfoSci-Journal Disciplines Business, Administration, and Management. Recommend this product to your librarian: www.igi-global.com/e-resources/libraryrecommendation/?id=2