Carbon Capture, Utilization and Storage in China: Emerging Policies and Laws

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The Center for Climate Change Law has released a white paper tracking China’s policies and laws on carbon   capture, utilization and storage (CCUS). China has the world’s largest coal reserves and has been zealous in using its coal to drive rapid economic development in recent decades, leading it to account for half of all global coal use in 2010. Given China’s projected growth and its likely continued reliance on coal for the foreseeable future, CCUS may prove a critical strategy for controlling China’s carbon emissions. China’s government has already attached great importance to CCUS, and appears to be pursuing the technology with a sense of urgency and a firm belief in its feasibility.

This paper first collects government policies that impact or support CCUS technology research and project deployment. It shows that the national climate policies adopted by the central government approve of and create at least nominal support for technology development and deployment of CCUS projects. There is, however, a significant gap between legislative ambition and the current status of CCUS activities.  The paper also summarizes several existing laws that may prove relevant for the regulation of CCUS, in an effort to understand their potential applicability in regulating future CCUS activities. Finally, the paper examines several of the most prominent international collaborative efforts underway in China.

The paper identifies several challenges to China’s CCUS development. The most significant one—which mirrors the key challenge faced by other countries—is how China will address the high cost of CCUS. It will require making government or collaborative investments in CCUS technology in order to begin learning by doing and hopefully bring down costs.   The second challenge lies in the transition of CCUS to a commercial-scale market: China needs a policy framework to engage businesses currently being kept out of the CCUS market. The paper also notes that China’s limited regulatory experience is a potential impediment to CCUS development. Drawing from other countries’ early efforts at CCUS regulation might help inform China’s progress in this regard.

This policy white paper was prepared by Yan Gu under the supervision of Shelley Welton and Michael Gerrard.

Photo courtesy of Climate Change Media Partnership