CHINA:

A sea change in the nation's attitude toward carbon capture

When European and Chinese scientists first agreed to collaborate on capturing carbon dioxide from power plants and storing it underground, China's entire carbon capture and sequestration "team" was composed of two Tsinghua University graduate students.

Less than five years later, the landscape is markedly different. China's first near-zero-emissions coal plant won state approval this month -- an apparent formality, since construction already is far under way. Two other pilots are in the works, including one in inner Mongolia that could be the largest sequestration project in the world. Conferences on carbon capture in China now routinely feature high-level government and industry leaders.

And one of those once-lowly grad students, analysts said, is among China's negotiators at the international forum of the world's 17 major economies meeting on energy issues next month in Mexico City.

"It's a definite shift in attitude," said Matthew Webb, coal campaign leader in Britain's Foreign and Commonwealth Office, who once led the ongoing attempts at cooperation between Europe and China on carbon capture and sequestration, or CCS.

"It's not political taboo anymore," he said. "It's a reality that needs to be addressed."

Washington is eyeing the metamorphosis with interest. The Obama administration has made carbon capture cooperation with China a top goal in its bilateral climate change negotiations. Indeed, some experts argue that a significant Sino-U.S. collaboration on CCS could be the key to unlocking entrenched climate change positions in both countries.

That, in turn, might help propel a new international treaty reducing global greenhouse gas emissions, which U.N. negotiators want signed this December at a major climate summit in Copenhagen.

"It seriously increases the likelihood of getting an agreement in Copenhagen if these two can agree on a path forward," said Jake Schmidt, international policy director for the Natural Resources Defense Council.

So far, cooperation has been limited. But upon leaving for China last month, Department of Energy Assistant Secretary David Sandalow called it a "top priority." The Obama administration, he said, wants to establish 20 commercial, operational CCS projects by 2020 and sees China as an integral part of reaching that goal.

China is the world's biggest coal producer. About half of its coal use is for electricity, and 80 percent of the country's electricity generation is fueled by coal.

At the same time, China's ravenous economic growth continues to feed its need. According to the Pew Center on Global Climate Change, China added more than 90 gigawatts of new coal-fired power plant capacity in 2006 alone -- "more than the entire fleet of generating plants in the United Kingdom." Last year, China surpassed the United States as the world's largest emitter of heat-trapping gases.

No alternative to coal 'for many decades'

In testimony to Congress earlier this month, Brookings Institution China expert Kenneth Lieberthal declared that there is "no serious alternative to coal for many decades to come" in China. Without the development of carbon-reducing technologies, Lieberthal warned, "the future looks grim for China's carbon emissions."

Indeed, Sandalow noted when he was in China, even in the unlikely event that every other nation in the world slashes emissions 80 percent by midcentury, China's greenhouse gas emissions trajectory alone would send global average temperatures soaring by 2.7 degrees Celsius -- "far above dangerous levels" according to scientists.

"If we can't find a solution to climate change that can apply to coal in China, I don't think we can solve climate change," said Sarah Forbes, a senior associate at the Washington, D.C.-based World Resources Institute think tank.

But for Forbes and others who work on carbon capture and storage policy, the problem also offers opportunity.

"If we want China to reduce their emissions, they have to find a way to keep using it," said Kelly Sims Gallagher, director of energy policy research at Harvard University's Belfer Center for Science and International Affairs.

Cooperation, they and others argue, would reduce both the costs and the risks of research and demonstration projects. Meanwhile, the United States could position itself as a technology provider to a vast market. So far, though, China is moving ahead on its own.

Earlier this month, the National Development and Reform Commission green-lighted the country's largest power producer, Huaneng Group, to build China's first commercial-scale integrated gasification combined cycle (IGCC) power plant. Based in Tianjin city, near Beijing, the 250-megawatt plant is planned in three phases and could ultimately capture 5,000 tons of CO2 per day, said Julio Friedmann, head of the carbon storage program at Lawrence Livermore National Laboratory.

Friedmann said the state approval for China's GreenGen masks the fact that the decision was almost superfluous. The site, he said, already is largely built. The state ruling simply allowed for a new road to the plant to be built. He estimated that the first phase of construction will be completed this year.

"That's way in advance of FutureGen," Friedmann said, referring to a planned state-of-the-art CCS plant that the Bush administration blocked last year, but which President Obama revived last month. "That's way ahead of any project," he maintained.

At the same time, China's largest coal producer, the Shenhua Group, is conducting a CCS demonstration in Inner Mongolia. Friedmann said the sequestration project will likely inject 100,000 tons of CO2 underground by the end of this year and ultimately aims to capture 3 million tons annually. And PetroChina -- an arm of the state-owned China National Petroleum Corp., also is conducting pilot test injections of CO2, Forbes said.

Banning Garrett directs the Asia Program at the Washington, D.C.-based Atlantic Council think tank, which is hosting a conference this week in Beijing on U.S.-China cooperation on low-emissions coal technologies. Garrett said he believes Chinese leaders recognize that the future global economy will be carbon-constrained.

"They know they have to keep using coal, and they know if they're going to keep using it, they have to figure out how to capture the CO2," he said.

Seeing potential sales to the West?

Others attribute China's newfound passion to the desire to beat Europe and North America to a milestone. But even more important than national pride may be a growing conviction that the West will buy CCS technology.

But not everyone is bullish about China's approach to coal.

James Childress, executive director of the Gasification Technologies Council, which represents companies focused on "clean coal" technologies, noted that China is the largest market for gasification in the world today. Yet gasification is primarily used in fertilizer and chemical production rather than power production.

Without a price on carbon, Childress said, power gasification is "not a priority" for China. Leaders may undertake some major carbon capture projects to curry international goodwill, or perhaps because leaders see a market for the export of new technologies. But, he said, "The Chinese have no incentive to do anything other than burn coal."

Joshua Busby, an assistant professor at the LBJ School of Public Affairs at the University of Texas, noted that China's chief environmental concerns are controlling pollution and ensuring energy security. Indeed, its moves to ramp up renewable energy production and increase energy efficiency -- widely praised by the Obama administration as creating impressive emissions reductions -- were launched with concerns other than climate change in mind.

China has been indifferent to cooperation on CCS, Busby said, because the technology's benefits are limited to reducing CO2. "There are not as many co-benefits for air pollution," he said.

Still, China's current attitude toward carbon capture represents a 180-degree turnaround from its stance at the beginning of the decade, they and others acknowledge.

Webb said that when the European Union first launched cooperative studies with China on CCS in 2005, the technology was "off the agenda" in China.

"It was impossible to talk to Chinese negotiators about CCS," he said. "They saw any move on carbon abatement of coal as setting a long-term precedent" that could cost the country billions and lock China into unwanted promises of reducing emissions, he said.

Added Friedmann, "Five years ago, you'd have a discussion on CCS and you'd meet the 'C' team. Now, you meet the 'A' team. They take this stuff seriously."

Upcoming summit on carbon capture and storage

Early next month, China is hosting a global think tank summit where CCS will feature prominently. In attendance, according to the invitation letter issued by the China Society for Policy Study, will be heads of the National Development and Reform Commission; the ministries of Finance, Commerce, Science and Technology, and Environmental Protection; and the People's Bank of China.

The taboo may have been lifted, but it remains unclear what kind of CCS cooperation may develop between the United States and China.

Because industrialized countries have acknowledged in international climate negotiations a historic responsibility for causing climate change, it will still be up to the West to put up the big bucks on CCS, experts note.

To date, cooperation between the European Union and a separate joint CCS venture between Australia and China remais on paper, with millions of dollars having gone toward research and studies but no actual projects.

Meanwhile, environmental groups in the United States have been giving serious thought to what American cooperation with China might look like. George Peridas, a scientist at the Natural Resources Defense Council's climate center, said his organization will recommend to the State Department that the United States first help China target CO2 from fertilizer and coal plants.

Unlike at power plants, where carbon dioxide concentration is mixed with other gases and is more costly to separate, CO2 strains at fertilizer and chemical plants are purer. Peridas said the United States could offer geological expertise and about $100 million over five years.

The result, he estimated, would be a capture of 15 million to 25 million tons of carbon dioxide. That would be "a short-term, immediate win" while the United States hammers out longer-term negotiations.

"What's really missing is the shift from information exchange to a more practical initiative that actually puts CO2 in the ground," Peridas said.