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Highlights

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Feedstock for hydrogen production

CCUS a top priority for China

China's strategy to achieve net zero will require large-scale deployment of carbon capture, usage and storage (CCUS) to remove CO2 from coal-fired power generation and from hydrogen production, energy experts said at June 22 forum.

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While coal was heavily exposed to China's ambitious target to achieve net zero climate emissions by 2060, experts believed the solution was not to abandon the fuel but to upgrade the industry, reducing its emissions and developing new value.

"Energy transition not only includes substituting fossil fuels with non-fossil fuels. Facilitating low-carbon use of fossil fuels is also an important element," Sang Shuxun, Dean of Low Carbon Energy Institute, China University of Mining and Technology, said at the Energy High-Quality Development Forum.

Sang said closure of conventional power plants would lead to Yuan 3-7 trillion ($0.46 trillion-1.08 trillion) of stranded assets, with employee numbers in the industry already down by 40% between 2013-2018.

As such, the development of the sector needed a cautious approach, considering social stability and equality, Sang said.

Long-lasting demand

Presenters thought future demand for coal would be maintained by backup power generation and use as a raw material to produce hydrogen via gasification.

China needed a twin-track approach to a net zero electricity system, said Lu Gang, Director of Energy Strategy and Plan Institute, the research arm under State Grid Corporation of China.

This would be achieved via renewables with storage, and fossil fuels with CCUS, Lu said.

Storage technologies can help overcome near-term fluctuations in solar and wind output but fossil fuels would still be needed under extreme weather conditions, he said.

Sang suggested building up strategic reserves of coal and identifying where coal resources were located to ensure energy security without directly increasing coal production.

Currently 70% of China's hydrogen comes from coal gasification. In future CCUS could be implemented to support coal-based hydrogen production, removing the bulk of emissions, Sang said.

A conservative estimate would be for coal consumption of around one billion metric tonnes in 2050, still contributing 10%-15% of China's total energy consumption, he said.

Capture urgency

Given the future role foreseen for coal, development of carbon capture was of critical importance, but present-day China faced challenges as well as opportunities, speakers said.

"The financing environment for CCUS has improved," said Xu Jinmiao, Energy Specialist at Asian Development Bank, addressing the First Asia CCUS Network Forum on June 23.

"China has incorporated CCUS in its 14th five-year plan for the first time in history and the Ministry of Science and Technology is preparing a roadmap for carbon peaking and carbon neutrality, in which CCUS is expected to be a significant composition," Xu said.

Despite the emergence of a supportive framework, technology bottlenecks, slow development of infrastructure and a lack of market structure have resulted in high costs and limited deployment, Lu said.

CCUS projects need high-density CO2 streams to lower abatement costs. However, Sang noted CO2 density was relatively low in exhaust gases emitted from China's coal-fired power plants, and there was no pipeline network at present to facilitate long-distance CO2 transmission or the development of clusters.

"In future we must develop demonstration projects that can be implemented in the coal industry at large scale," Sang concluded.

According to the Global CCS Institute, China Energy Investment Corporation started construction last year of a 150,000 metric tonne/yr CCS demonstration project in Shaanxi Province.

It is to test new advanced solvents and adsorption materials for carbon capture, the institute said. China has previously supported pilot projects in the power generation, natural gas processing, cement, fertilizer, and coal to chemical sectors.