CASE STUDY

How to Meet Climate Targets with Carbon Capture and Storage

The Asia and Pacific region is responsible for about half of global carbon emissions. Photo credit: ADB.
The Asia and Pacific region is responsible for about half of global carbon emissions. Photo credit: ADB.

Published: 25 October 2021

With the People's Republic of China and Indonesia as centers of excellence, a regional program demonstrates how the technology can reduce carbon intensity.

Overview

The People’s Republic of China (PRC) and Indonesia produce copious amounts of carbon dioxide (CO2), mainly because their power generation systems are hugely dependent on fossil fuels. The two countries’ carbon emissions are among the highest in the world, and both are keen on becoming carbon neutral as part of their commitments to the Paris Agreement.

Since the turn of the millennium, the PRC and Indonesia have been exploring ways to decarbonize their economies. But much still needs to be done in terms of coordinating oversight for research and development and scaling up deployment of CO2 capture and storage (CCS) technologies.

In 2019, ADB completed a technical assistance to support the PRC and Indonesia in improving their capacity for CCS research and development. Financed by the ADB-administered Carbon Capture and Storage Fund under the Clean Energy Financing Partnership Facility, the CCS program’s objective is to create a stronger strategic architecture and more coordinated research and development for accelerating and scaling up CCS development and deployment, as well as dissemination of best practices on CCS in Asia. The project under review  initially concentrated on PRC and Indonesia and later on expanded its activities to Bangladesh, India, Mongolia, and Viet Nam.


Project information


Project snapshot

  • August 2014: Approval Date...
  • August 2019: Completion Date
  • $3.3 million: Total financing from the Carbon Capture and Storage Fund under ADB’s Clean Energy Financing Partnership Facility

Challenges

The PRC is among the world’s largest consumers of coal, accounting for over half of global consumption. Its power generation sector uses more than half of that coal to provide about 80% of the country’s electricity and emits over 4 gigatons of CO2 (GtCO2) per year, 95% from coal-fired power generation. Continued economic growth is projected to drive energy consumption surges for the next several decades. With primary energy coming from coal and the expectation that this reliance on coal will persist for decades to come, PRC will likely continue as one of the world's largest CO2 emitters for some time. Therefore, wide deployment of CCS in PRC over the long term will be necessary to significantly reduce national emissions. The PRC has announced it would become carbon neutral by 2060 at the United Nations General Assembly in September 2020. 

Similarly, Indonesia has a heavily fossil fuels-based economy, consuming coal, oil, and gas produced domestically plus imported petroleum. As the world's largest coal exporter and a substantial liquefied natural gas exporter, the country is confronted by increasing CO2 emissions from growing domestic consumption of indigenous coal and fossil fuels. It has significant requirements for the deployment of large-scale, low-carbon technology in the long term. Moreover, the government has been increasingly vocal about climate change and its impacts on the developing world.

Both the PRC and Indonesia have been considering the creation of legal and regulatory frameworks for advancing CCS.

Context

The Asia and Pacific region is responsible for about half of global CO2 emissions. Primary energy demand in the region is expected to increase by about 24% by 2030. Despite the rapid increase in renewable energy supply, trends suggest that this increase in demand will still translate into increased consumption of fossil fuels and CO2 emissions in the region. The PRC and India accounted for 27% and 7% of the global COemissions in 2017.

While experiencing rapid growth and development, Asia and Pacific remains one of the most vulnerable regions to climate change. It faces the risk of losing its development gains to climate change impacts if mitigation and adaptation actions are not put in place.

CCS is identified as one of the technologies and practices that can help meet climate targets. The International Energy Agency’s Carbon Capture and Storage Roadmap highlighted the significant role that CCS will need to play in achieving an atmospheric CO2 concentration stabilization of 450 ppm (parts per million) by 2050. CCS will provide about 14% of the total CO2 emissions reductions out to 2050. Achieving this contribution of emissions reductions will require an ambitious CCS growth-path, with 100 projects needed globally by 2020 and over 3,000 by 2050. In both 2020 and 2050, major developing countries, including Indonesia and the PRC, will need to contribute to CCS deployment.

Solutions

ADB’s technical assistance, approved in 2014, initiated a support program for CCS research and development (R&D) with the institutes in PRC and Indonesia serving as centers of excellence.

The CCS program was administered by ADB to assist in the establishment of the research centers in the PRC and in Indonesia. They are expected to act as local knowledge hubs in this emerging technology. The CCS centers are to implement R&D programs on CCS technologies in the region and organize activities to develop the capacity to enable widespread deployment in both countries and in the region.

Other program activities included conferences, workshops, dialogues, study visits, and other initiatives to foster regional cooperation, establish new partnerships with other institutes in and outside the region, and strengthen leadership in CCS-related capacity development.

Results

The CSS program established three research centers to improve R&D activity on CCS in Guangdong and Shanghai in the PRC and Bandung as well as Jakarta in Indonesia.

Under the CCS program, the activities of these research centers help the host countries adopt CCS technology, create necessary regulations, and obtain financial access for developing projects. They are also expected to foster regional cooperation on these aspects and build capacity in the PRC and Indonesia.

The program also started exploring CCS as a tool to reduce greenhouse gas emission for hard-to-decarbonize industries in the steel, cement, and petrochemical sectors. It produced a background study to help prepare industries for decarbonization by utilizing and not just storing captured carbon. The paper also investigates the financing requirements and mechanisms, as well as policy drivers and recommendations, to advance readiness to shift to a low-carbon era.

The CCS program bridged the gap between policy, technology, and finance mechanisms, and supported the development of demonstration of CCS projects in Indonesia. It expanded activities beyond the PRC and Indonesia and explored possibilities of implementing carbon capture, utilization, and storage in Bangladesh, India, Mongolia, and Viet Nam, creating an opportunity for further engaging these countries.

Lessons

The CSS program offers the following lessons:

Local knowledge and capacity building are important. Support to research centers should include capacity building to ensure that they are well-equipped to successfully carry out studies and demonstration projects that will pave the way for the deployment of large-scale technologies. More experts are needed to enhance local capacities in developing and implementing demonstration projects, especially in countries that have indicated continued high dependence on fossil fuels to sustain their economic growth.

Ensure government and other stakeholders’ participation. Government involvement was found to be critical for the sustainable operation of the research centers, especially in the implementation of large-scale demonstration projects. Future programs supporting these centers should involve government and important stakeholders in their operation right from the start. Coordination with national and local governments, in addition to financial, technical, and administrative requirements, is critical in demonstrating large-scale projects.

Partnerships can be beneficial. Partnership with organizations from various disciplines have enhanced information and knowledge sharing, which is important in advancing R&D and deployment of technologies.

Resources

Asian Development Bank (ADB). Regional: Promoting Carbon Capture and Storage in the People's Republic of China and Indonesia (link is external)

ADB. 2019. Background Study on CCUS Readiness in Power, Iron and Steel, Cement and Petroleum Sectors (link is external). Manila.

Ask the Experts

  • Kee-Yung Nam
    Principal Energy Economist, Sustainable Development and Climate Change Department, Asian Development Bank

    Kee-yung Nam conceptualizes and develops energy sector strategies and policies as well as provides advice on lending and non-lending projects for the sector. He is also responsible for the energy sector trust funds of ADB. He undertakes analysis and assessment of key sectoral issues, particularly in clean energy technologies.

  • Asian Development Bank (ADB)

    The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

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