Impact of international climate policies on CO2 capture and storage deployment: Illustrated in the Dutch energy system

A greenhouse gas emission trading system is considered an important policy measure for the deployment of CCS at large scale. However, more insights are needed whether such a trading system leads to a sufficient high CO₂ price and stable investment environment for CCS deployment. To gain more insights, we combined WorldScan, an applied general equilibrium model for global policy analysis, and MARKAL-NL-UU, a techno-economic energy bottom-up model of the Dutch power generation sector and CO₂ intensive industry. WorldScan results show that in 2020, CO₂ prices may vary between 20 €/tCO₂ in a Grand Coalition scenario, in which all countries accept greenhouse gas targets from 2020, to 47 €/tCO₂ in an Impasse scenario, in which EU-27 continues its one-sided emission trading system without the possibility to use the Clean Development Mechanism. MARKAL-NL-UU model results show that an emission trading system in combination with uncertainty does not advance the application of CCS in an early stage, the rates at which different CO₂ abatement technologies (including CCS) develop are less crucial for introduction of CCS than the CO₂ price development, and the combination of biomass (co-)firing and CCS seems an important option to realise deep CO₂ emission reductions.     

Electricity consumption and CO2 capture potential in Spain

In this paper, different electricity demand scenarios for Spain are presented. Population, income per capita, energy intensity and the contribution of electricity to the total energy demand have been taken into account in the calculations. Technological role of different generation technologies, i.e. coal, nuclear, renewable, combined cycle (CC), combined heat and power (CHP) and carbon capture and storage (CCS), are examined in the form of scenarios up to 2050. Nine future scenarios corresponding to three electrical demands and three options for new capacity: minimum cost of electricity, minimum CO₂ emissions and a criterion with a compromise between CO₂ and cost (CO₂-cost criterion) have been proposed. Calculations show reduction in CO₂ emissions from 2020 to 2030, reaching a maximum CO₂ emission reduction of 90% in 2050 in an efficiency scenario with CCS and renewables. The contribution of CCS from 2030 is important with percentage values of electricity production around 22–28% in 2050. The cost of electricity (COE) increases up to 25% in 2030, and then this value remains approximately constant or decreases slightly.     

Comparative assessment of CO2 capture technologies for carbon-intensive industrial processes

This article presents a consistent techno-economic assessment and comparison of CO₂ capture technologies for key industrial sectors (iron and steel, cement, petroleum refineries and petrochemicals). The assessment is based on an extensive literature review, covering studies from both industries and academia. Key parameters, e.g., capacity factor (91-97%), energy prices (natural gas: 8 €₂₀₀₇/GJ, coal: 2.5 €₂₀₀₇/GJ, grid electricity: 55 €/MWh), interest rate (10%), economic plant lifetime (20 years), CO₂ compression pressure (110 bar), and grid electricity CO₂ intensity (400 g/kWh), were standardized to enable a fair comparison of technologies. The analysis focuses on the changes in energy, CO₂ emissions and material flows, due to the deployment of CO₂ capture technologies. CO₂ capture technologies are categorized into short-mid term (ST/MT) and long term (LT) technologies. The findings of this study identified a large number of technologies under development, but it is too soon to identify which technologies would become dominant in the future. Moreover, a good integration of industrial plants and power plants is essential for cost-effective CO₂ capture because CO₂ capture may increase the industrial onsite electricity production significantly.For the iron and steel sector, 40-65 €/tCO₂ avoided may be achieved in the ST/MT, depending on the ironmaking process and the CO₂ capture technique. Advanced LT CO₂ capture technologies for the blast furnace based process may not offer significant advantages over conventional ones (30-55 €/tCO₂ avoided). Rather than the performance of CO₂ capture technique itself, low-cost CO₂ emissions reduction comes from good integration of CO₂ capture to the ironmaking process. Advanced smelting reduction with integrated CO₂ capture may enable lower steel production cost and lower CO₂ emissions than the blast furnace based process, i.e., negative CO₂ mitigation cost. For the cement sector, post-combustion capture appears to be the only commercial technology in the ST/MT and the costs are above 65 €/tCO₂ avoided. In the LT, a number of technologies may enable 25-55 €/tCO₂ avoided. The findings also indicate that, in some cases, partial CO₂ capture may have comparative advantages. For the refining and petrochemical sectors, oxyfuel capture was found to be more economical than others at 50-60 €/tCO₂ avoided in ST/MT and about 30 €/tCO₂ avoided in the LT. However, oxyfuel retrofit of furnaces and heaters may be more complicated than that of boilers.Crude estimates of technical potentials for global CO₂ emissions reduction for 2030 were made for the industrial processes investigated with the ST/MT technologies. They amount up to about 4 Gt/yr: 1 Gt/yr for the iron and steel sector, about 2 Gt/yr for the cement sector, and 1 Gt/yr for petroleum refineries. The actual deployment level would be much lower due to various constraints, about 0.8 Gt/yr, in a stringent emissions reduction scenario.     

Transition scenarios of power generation in China under global 2 °C and 1.5 °C targets

Under the Paris Agreement, targets implemented for 2100 specify temperature increases well below 2 °C, with an ambitious target of 1.5 °C. China signed this agreement and will support these global targets. The question remains whether they are possible, especially considering the slow progress in recent decades, despite the fact that the Kyoto Protocol implemented these targets in 2010. The Intergovernmental Panel on Climate Change (IPCC) required modeling research teams to analyze possible pathways, policy options, and cost benefit analyses for GHG mitigation. China’s CO₂ emissions from the energy and cement industries already accounted for almost 29% of global emissions in 2017, and this trend is expected to continue increasing. The role of China in global GHG mitigation is therefore crucial. This study presents a scenario analysis for China’s power generation against the background of the global 2 °C and 1.5 °C targets. We discuss the possibility of a lower CO₂ emission power generation scenario in China in order to evaluate the national emission pathway towards these targets. Our findings suggest that China can accomplish rapid transition in the power generation sector, reaching its emission peak before 2025. This would make the global 2 °C target possible because energy system development is a key factor. Furthermore, the recent progress of key power generation technologies, potential for further investment in the power generation sector, and recent policy implementation all significantly contribute to China following a low carbon emission development pathway.     

Delaying the introduction of emissions trading systems—Implications for power plant investment and operation from a multi-stage decision model

Relying on real options theory, we employ a multistage decision model to analyze the effect of delaying the introduction of emission trading systems (ETS) on power plant investments in carbon capture and storage (CCS) retrofits, on plant operation, and on carbon dioxide (CO₂) abatement. Unlike previous studies, we assume that the investment decision is made before the ETS is in place, and we allow CCS operating flexibility for new power plant investments. Thus, the plant may be run in CCS-off mode if carbon prices are low. We employ Monte Carlo simulation methods to account for uncertainties in the prices of CO₂ certificates, other inputs, and output prices, relying on a realistic parameterization for a supercritical pulverized coal plant in China. We find that CCS operating flexibility lowers the critical carbon price needed to support CCS investment because it renders CCS investment less irreversible. For a low carbon price path, operating flexibility also implies that delaying the introduction of an ETS hardly affects plant CO₂ abatement since the plant operator is better off purchasing emission certificates rather than operating the plant in CCS mode. Interestingly, for low carbon prices we find a U-shaped relation between the length of the delay and the economic value of the plant. Thus, delaying the introduction of an ETS may make investors worse off.     

Can China achieve its 2030 energy development targets by fulfilling carbon intensity reduction commitments?

China has proposed carbon intensity targets and energy development targets for 2030. This study investigates the linkages between these targets and assesses if China can achieve its energy development targets by fulfilling its carbon reduction commitments. To this end, it quantitatively evaluates the impact of carbon emission controls on the Chinese economy using a dynamic computable general equilibrium model. The results show that China's carbon abatement pledge cannot guarantee achievement of all energy objectives. China is likely to reach the upper limit of its carbon intensity target in 2020 and the lower limit in 2030 if current abatement efforts are maintained. To achieve the upper limit in 2030, the carbon price will be CNY 83/tCO₂. The energy consumption target for 2020 is likely to be realized but the 2030 target is not. A more stringent price constraint on carbon emissions would be helpful to the achievement of the non-fossil energy target in 2030, but would have a limited promoting effect on natural gas development. Our results reveal the linkages between China's energy targets and carbon emission targets, which is valuable to the cost-effective dual control of energy consumption and carbon emission.     

What will China's carbon emission trading market affect with only electricity sector involvement? A CGE based study

On December 29, 2017, China's Carbon Trading Scheme (ETS) was officially launched, and it may be the largest emission trading platform in the world. This paper establishes 5 counter-measured scenarios based on the recently launched China's national ETS market and constructs a dynamic recursive Computable General Equilibrium model to study the impact of national ETS on the economy, energy, and environment. We find that the national ETS will have a negative impact on GDP by 0.19%–1.44%. The national ETS can significantly increase the price of electricity, however, the increase in the prices of other commodities will be much lower than that of electricity. As long as the mechanism of the ETS market remains unchanged, emission reduction per year will increase linearly. Economic output and CO₂ emission are sensitive to Annual Decline factor (ADF). This paper argues that China's national ETS market is an effective tool to reduce CO₂ emission, and we suggest that ADF could be 0.5% when allocating carbon allowance for the electricity sector. This could balance economic output and CO₂ reduction. Also, it is easy to achieve the goal of “double control” (total amount and intensity) in China.     

Assessing the design of three carbon trading pilot programs in China

To help overcome the challenge of growing CO₂ emissions, China is experimenting with market-based instruments, including pilot CO₂ emissions trading systems (ETSs) in seven regions that serve as precursors of a national CO₂ ETS. Implementing an ETS in a rapidly growing economy in which government authorities exercise significant control over markets poses many challenges. This study assesses how well three of the most developed pilot ETSs, in Guangdong, Shanghai, and Shenzhen, have adapted carbon emissions trading to China's economic and political context. We base our study on new information gathered through interviews with local pilot ETS regulators and experts, analysis of recent trading data, and extensive legal and literature reviews. We point out instances in which pilot regulators have deftly tailored carbon emissions trading to China's unique context and instances in which designs are insufficient to ensure smooth operation. We also indicate areas in which broader institutional reforms of China's political economy may be required for carbon emissions trading to operate successfully. We make nine recommendations to improve the design and operation of the pilot programs and to inform the construction of a national CO₂ ETS.     

CCS: A future CO2 mitigation option for Germany?—A bottom-up approach

The role that carbon capture and storage (CCS) technologies could play within the framework of an overall CO₂ mitigation strategy is examined in the form of scenarios up to 2030 with the example of Germany. As the calculations show, the use of CCS can represent an interesting mitigation option in view of stringent CO₂ reduction goals. The scenarios, performed with the aid of the IKARUS optimization model, however, also show that according to cost-efficiency criteria a large number of measures would have to be taken covering all energy sectors. CCS can at best represent one element in an overall strategy. The model results show that a mitigation goal for 2030 corresponding to a 35% reduction of CO₂ as compared to 1990 is necessary to trigger a significant contribution of CCS. As an alternative to a CO₂ restriction, we also calculated reduction scenarios based on CO₂ penalties. These scenarios showed that a penalty price of approximately 30 €/tCO₂ is necessary before CCS can be included in the model.     

Regional development and carbon emissions in China

China announced at the Paris Climate Change Conference in 2015 that the country would reach peak carbon emissions around 2030. Since then, widespread attention has been devoted to determining when and how this goal will be achieved. This study aims to explore the role of China's changing regional development patterns in the achievement of this goal. This study uses the logarithmic mean Divisia index (LMDI) to estimate seven socioeconomic drivers of the changes in CO₂ emissions in China since 2000. The results show that China's carbon emissions have plateaued since 2012 mainly because of energy efficiency gains and structural upgrades (i.e., industrial structure, energy mix and regional structure). Regional structure, measured by provincial economic growth shares, has drastically reduced CO₂ emissions since 2012. The effects of these drivers on emissions changes varied across regions due to their different regional development patterns. Industrial structure and energy mix resulted in emissions growth in some regions, but these two drivers led to emissions reduction at the national level. For example, industrial structure reduced China's CO₂ emissions by 1.0% from 2013 to 2016; however, it increased CO₂ emissions in the Northeast and Northwest regions by 1.7% and 0.9%, respectively. Studying China's plateauing CO₂ emissions in the new normal stage at the regional level yields a strong recommendation that China's regions cooperate to improve development patterns.     

Implications of near-term mitigation on China's long-term energy transitions for aligning with the Paris goals

In the international community, there are many appeals to ratcheting up the current nationally determined contributions (NDCs), in order to narrow the 2030 global emissions gap with the Paris goals. Near-term mitigation has a direct impact on the required efforts beyond 2030 to control warming within 2°C or 1.5°C successfully. In this study, implications of near-term mitigation on China's long-term energy transitions until 2100 for aligning with the Paris goals, are quantified using a refined Global Change Assessment Model (GCAM) with six mitigation scenarios. Results show that intensifying near-term mitigation will alleviate China's transitional challenges during 2030–2050 and long-term reliance on carbon dioxide removal technologies (CDR). Each five-year earlier peaking of CO₂ allows almost a five-year later carbon neutrality of China's energy system. To align with 2°C (1.5°C), peaking in 2025 instead of 2030 reduces the requirement of CDR over the century by 17% (13%). Intensifying near-term mitigation also tends to have economic benefits to China's Paris-aligned energy transitions. Under 2°C (1.5°C), peaking in 2025 instead of 2030, with larger near-term mitigation costs by 1.3 (1.6) times, has the potential to reduce China's aggregate mitigation costs throughout the century by 4% (6%). Although in what way China's NDC is to be updated is determined by decision-makers, transitional and economic benefits suggest China to try its best to pursue more ambitious near-term mitigation in accordance with its latest national circumstances and development needs.     

Study on China's low carbon development in an Economy–Energy–Electricity–Environment framework

Emissions mitigation is a major challenge for China's sustainable development. We summarize China's successful experiences on energy efficiency in past 30 years as the contributions of Energy Usage Management and Integrated Resource Strategic Planning, which are essential for low-carbon economy. In an Economy–Energy–Electricity–Environment (E4) framework, the paper studies the low-carbon development of China and gives an outlook of China's economy growth, energy–electricity demand, renewable power generation and energy conservation and emissions mitigation until 2030. A business-as-usual scenario is projected as baseline for comparison while low carbon energy and electricity development path is studied. It is defined as low carbon energy/electricity when an economy body manages to realize its potential economic growth fueled by less energy/electricity consumption, which can be characterized by indexes of energy/electricity intensity and emissions per-unit of energy consumption (electricity generation). Results show that, with EUM, China, could save energy by 4.38 billion ton oil equivalences (toes) and reduce CO₂ emission by 16.55 billion tons; with IRSP, China, could save energy by 1.5 Btoes and reduce CO₂ emission by 5.7 Btons, during 2010–2030. To realize the massive potential, China has to reshape its economic structure and rely much on technology innovation in the future.     

China's energy and emissions outlook to 2050: Perspectives from bottom-up energy end-use model

Although China became the world's largest CO₂ emitter in 2007, the country has also taken serious actions to reduce its energy and carbon intensity. This study uses the bottom-up LBNL China End-Use Energy Model to assess the role of energy efficiency policies in transitioning China to a lower emission trajectory and meeting its 2020 intensity reduction goals. Two scenarios – Continued Improvement and Accelerated Improvement – were developed to assess the impact of actions already taken by the Chinese government as well as planned and potential actions, and to evaluate the potential for China to reduce energy demand and emissions. This scenario analysis presents an important modeling approach based in the diffusion of end-use technologies and physical drivers of energy demand and thereby help illuminate China's complex and dynamic drivers of energy consumption and implications of energy efficiency policies. The findings suggest that China's CO₂ emissions will not likely continue growing throughout this century because of saturation effects in appliances, residential and commercial floor area, roadways, fertilizer use; and population peak around 2030 with slowing urban population growth. The scenarios also underscore the significant role that policy-driven efficiency improvements will play in meeting 2020 carbon mitigation goals along with a decarbonized power supply.     

Determinants of the costs of carbon capture and sequestration for expanding electricity generation capacity

This study models the costs of electricity generation with carbon capture and sequestration (CCS), from generation at the power plant to carbon injection at the reservoir, examining the economic factors that affect technology choice and CCS costs at the individual plant level. The results suggest that natural gas and coal prices have profound impacts on the carbon price needed to induce CCS. To extend previous analyses we develop a "cost region" graph that models technology choice as a function of carbon and fuel prices. Generally, the least-cost technology at low carbon prices is pulverized coal, while intermediate carbon prices favor natural gas technologies and high carbon prices favor coal gasification with capture. However, the specific carbon prices at which these transitions occur is largely determined by the price of natural gas. For instance, the CCS-justifying carbon price ranges from $27/t CO₂ at high natural gas prices to $54/t CO₂ at low natural gas prices. This result has important implications for potential climate change legislation. The capital costs of the generation and CO₂ capture plant are also highly important, while pipeline distance and criteria pollutant control are less significant.     

Assessment of China's climate commitment and non-fossil energy plan towards 2020 using hybrid AIM/CGE model

China made a commitment in Copenhagen to reduce its carbon dioxide emissions per unit of GDP from 40% to 45% compared with the 2005 level by 2020, and is determined to vigorously develop non-fossil fuels. This study analyzes the effects and impacts of policies that could help to achieve China's Copenhagen commitments with a hybrid static CGE model in which the electricity sector is disaggregated into 12 generation technologies. Four scenarios are developed, including the reference scenario A, the reference scenario B and two carbon constraint scenarios. The results show that carbon intensity in terms of GDP will fall by 30.97% between 2005 and 2020 in the reference scenario A, and will be reduced further by 7.97% if China's targeted non-fossil energy development plans can be achieved in the reference scenario B. However, the rest of the 40–45% target must be realized by other measures such as carbon constraint. It is also observed that due to carbon intensity constraints, GDP loss would be from 0.032% to 0.24% compared to the reference scenario B, and CO₂ emission reductions are due mainly to decreases in coal consumption in the electricity sector and manufacturing sector.     

Metal requirements of low-carbon power generation

Today, almost 70% of the electricity is produced from fossil fuels and power generation accounts for over 40% of global CO₂ emissions. If the targets to reduce climate change are to be met, substantial reductions in emissions are necessary. Compared to other sectors emission reductions in the power sector are relatively easy to achieve because it consists mainly of point-sources. Carbon Capture and Storage (CCS) and the use of low-carbon alternative energy sources are the two categories of options to reduce CO₂ emissions. However, for both options additional infrastructure and equipment is needed. This article compares CO₂ emissions and metal requirements of different low-carbon power generation technologies on the basis of Life Cycle Assessment. We analyze the most critical output (CO₂) and the most critical input (metals) in the same methodological framework. CO₂ emissions and metal requirements are compared with annual global emissions and annual production for different metals. It was found that all technologies are very effective in reducing CO₂ emissions. However, CCS and especially non-fossil technologies are substantially more metal intensive than existing power generation. A transition to a low-carbon based power generation would require a substantial upscaling of current mining of several metals.     

Modeling a clean energy standard for electricity: Policy design implications for emissions,supply, prices,and regions

The electricity sector is responsible for roughly 40% of U.S. carbon dioxide (CO₂) emissions, and a reduction in CO₂ emissions from electricity generation is an important component of the U.S. strategy to reduce greenhouse gas emissions. Toward that goal, several proposals for a clean energy standard (CES) have been put forth, including one espoused by the Obama administration that calls for 80% clean electricity by 2035 phased in from current levels of roughly 40%. This paper looks at the effects of such a policy on CO₂ emissions from the electricity sector, the mix of technologies used to supply electricity, electricity prices, and regional flows of clean energy credits. The CES leads to a 30% reduction in cumulative CO₂ emissions between 2013 and 2035 and results in dramatic reductions in generation from conventional coal. The policy also results in fairly modest increases on national electricity prices, but this masks a wide variety of effects across regions.     

Biomass and CCS: The influence of technical change

The combination of bioenergy production and carbon capture and storage technologies (BECCS) provides an opportunity to create negative emissions of CO₂ in biofuel production. However, high capture costs reduce profitability. This paper investigates carbon price uncertainty and technological uncertainty through a real option approach. We compare the cases of early and delayed CCS deployments. An early technological progress may arise from aggressive R&D and pilot project programs, but the expected cost reduction remains uncertain. We show that this approach results in lower emissions and more rapid investment returns although these returns will not fully materialise until after 2030. In a second set of simulations, we apply an incentive that prioritises sequestered emissions rather than avoided emissions. In other words, this economic instrument does not account for CO₂ emissions from the CCS implementation itself, but rewards all the sequestered emissions. In contrast with technological innovations, this subsidy is certain for the investor. The resulting investment level is higher, and the project may become profitable before 2030. Negative emission in bioethanol production does not seem to be a short-term solution in our framework, whatever the carbon price drift.     

Comparison of top-down and bottom-up estimates of sectoral and regional greenhouse gas emission reduction potentials

The Fourth Assessment Report of IPCC reports that greenhouse gas emissions can be reduced by about 30–50% in 2030 at costs below 100 US$/tCO₂ based on an assessment of both bottom-up and top-down studies. Here, we have looked in more detail into the outcomes of specific models and also analyzed the economic potentials at the sectoral and regional level. At the aggregated level, the findings of the IPCC report are confirmed. However, substantial differences are found at the sectoral level. At the same time, there seems to be no systematic difference in the reduction potential reported by top-down and bottom-up approaches. The largest reduction potential as a response to carbon prices exists in the energy supply sector. Reduction potential in the building sector may carry relatively low costs. Although uncertainties are considerable, the modeling results and the bottom-up analyses all suggest that at the global level around 50% of greenhouse gas emissions may be reduced at carbon price (costs) below 100$/tCO₂-eq—but with a wide range of 30–60%. At a carbon price (costs) less than 20$/tCO₂-eq, still 10–35% of emissions may be abated. The variation of results is higher at low carbon-price levels than at high levels.     

The peak of CO2 emissions in China: A new approach using survival models

Chinese government proposed the target that China's CO₂ emissions could peak by 2030. Under this background, this paper focused on when and how can China's CO₂ emissions reach peak. By analyzing the survival data of 91 countries from 1960 to 2014, this paper adopted the survival models to explore the factors that could influence the timing of emissions peaking and predicted the conditional probability of realizing the peak of CO₂ emissions. The empirical results indicated that the total-factor productivity (TFP) plays a very important role with the average marginal effect of 0.012 and 0.066 for OECD (Organization for Economic Co-operation and Development) and non-OECD countries, respectively. It was estimated that China would peak in 2030, 2028 and 2025 in three different scenarios with the probability of >50%. The probability of peaking will increase to 98% in 2037, 2034 and 2030 under the these scenarios. These findings could help policy-makers to reduce carbon emissions and achieve the CO₂ emissions target.