Analysis of Global CCS Technology, Regulations and Its Potential for Emission Reduction with Focus on China

ADVANCES IN CLIMATE CHANGE RESEARCH 2(2): 57–66, 2011 www.climatechange.cn DOI: 10.3724/SP.J.1248.2011.00057 POLICY FORUM

Analysis of Global CCS Technology, Regulations and Its Potential for Emission Reduction with Focus on China Ying Fan, Lei Zhu, Xiaobing Zhang Center for Energy & Environmental Policy Research, Institute of Policy & Management, Chinese Academy of Sciences, Beijing 100190, China

Abstract This paper introduces the development of Carbon Capture and Storage (CCS) technology, the progress in CCS demonstration projects, and regulations and policies related to CCS. Barriers and limitations for the large-scale deployment of CCS are discussed. CCS and different technological solutions for emission reduction (e.g., energy conservation and renewable energy) are compared. The analysis shows that China should carefully evaluate the negative impacts of CCS deployment and needs to enhance the research and development input in CCS in order to master core technologies of CCS systems. Furthermore, CCS incentives should depend on actual CCS development. Based on the current situation, China may need to focus on retrofitting existing thermal power plants with CCS technology, so CCS can be promoted for future large-scale application. Keywords: CCS technology; climate change; emission reduction; policies and regulations Citation: Fan, Y., L. Zhu, and X. Zhang, 2011: Analysis of global CCS technology, regulations and its potential for emission reduction with focus on China. Adv. Clim. Change Res., 2(2), doi: 10.3724/SP.J.1248.2011.00057.

1 Introduction

plied to store CO2 as an emission reduction technology (http://www. inference. phy. cam.ac.uk/cps/energy/ JonGibbins.pdf). As CCS can capture and store 90% of CO2 from emission sources, it is viewed as a key option for sustainable use of fossil fuels in the future [Socolow et al., 2004; IPCC, 2005; 2007; IEA, 2008; EC, 2007a]. This paper introduces the development of CCS technology, the progress in CCS demonstration projects, and the regulations and policies related to CCS. Barriers and limitations for the large-scale deployment of CCS are discussed. As CCS has great emission reduction potential, we have compared CCS and different technological solutions for emission reduction (e.g., energy conservation and renewable

In order to address climate change and reduce greenhouse gas (GHG) emissions, it is necessary to find an efficient way to capture and store the GHGs caused by the consumption of fossil fuels [IPCC, 2001; 2007]. During the burning of fossil fuels for the generation of energy, Carbon Capture and Storage (CCS) is a process which separates CO2 , transports CO2 to storage sites and hence isolates it from the atmosphere for a long time [IPCC, 2005]. The research in this technology started in 1975 as the USA injected CO2 into the underground in order to enhance oil recovery rates. In 1989, the MIT proved that CCS can be apReceived: 16 August 2010 Corresponding author: Ying Fan, [email protected]

1

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energy) in China.

2 The development of CCS 2.1 Technology development Currently CCS has not come to commercialization and its development is falling behind other emission reduction technologies based on amounts in patents of invention. In 2005, 25–60 CCS technologies were applied for patents, while patents for renewable technologies are on average 2000 per year (Fig. 1). CCS has the largest emission reduction potential but the lowest patent amount [Glachant et al., 2008]. On one hand, parts of CCS technical process patents (the invention patents of CO2 capture, transportation and atmosphere storage) are not included in the International Patent Classification (IPC) scheme, therefore the amount of patents may be underestimated; on the other hand, it may reflect that CCS development is falling behind other emission reduction technologies.

Figure 1 Average annual number of patents in the field of global GHG reduction over 1998–2005 and their reduction potential before 2030 [Glachant et al., 2008]

Looking at CO2 capture, the three major capturing systems, pre-combustion, post-combustion, and oxygen enrichment combustion have not been put into commercial products yet. Other capture technologies (e.g., inorganic membranes separating CO2 ) are still in research stage. Further, physical/chemical/membrane absorption/adsorption and cryo-condensation of CO2 have not been put into use either [Zhang and Li, 2008]. Carbon capture is a capital-intensive process. A key technical barrier for CCS is how to separate CO2 from the atmosphere under controlled cost. CO2 capture accounts for 75% of the total cost. Currently CO2 1 ○ 2 ○

capture costs range at about 40–60 US$ per ton with existing technologies. Acceptable costs are around 20 1 ○ US$ per ton . Several studies emphasise that transportation of captured CO2 is similar to that of oil and gas [IPCC, 2005]. Although the USA and some other countries have over 30 years experience in CO2 pipeline transportation, they all transport the natural CO2 from the underground with high purity for enhanced oil recovery. The purity of CO2 captured by CCS can differ by the emission sources and capture technologies. So it may have different impact on transportation pipelines. The previous pipeline design can not fully satisfy the requirements for transporting impure CO2 captured by CCS [Seevam et al., 2008]. There is still a lack of research in the safety of pipeline designs for impure CO2 transportation. Focussing on the storage, large amounts of CO2 will be injected into the underground (e.g., saline aquifers and oil fields) and stored for hundreds of years [IPCC, 2005]. High requirements for safety and reliability of the storage sites are necessary. So the selection of storage sites needs extensive geological survey data. Currently, comprehensive measurement system to estimate the potential risk (underground water pollution, ecological environment damage, the impact of CO2 leakage and transfer on public health, environment and even climate change) of CO2 long-term storage has not been established, which makes it difficult to promote management and monitoring of storage sites. The storage period of CO2 may be longer than its operational enterprises can exist, so it is not only necessary to define the responsibilities of enterprises, but also the role of the government (supervisor or stakeholder). Furthermore, the problem of responsibility transfer in long-term storage remains unsolved too.

2.2 CCS demonstration projects There have been more than 40 CO2 capture projects which are under or are planned for construc2 ○ tion worldwide , mainly concentrated in Europe,

http://www.fossil.energy.gov/programs/sequestration/capture/index.html http://www.co2crc.com.au/

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North America and Australia. Most of them belong to projects related to retrofit power generation with CCS. This shows that the power sector will be the major sector for extensive future CCS application. Most of these projects adopt pre-combustion and post-combustion technologies, while some of them adopt oxygen enrichment combustion technology. This reflects the development level of each capturing technology (the development of pre-combustion and post-combustion technologies are faster than oxygen enrichment combustion technology). Nearly 30 CO2 storage projects (under or planned for construction) are concentrated in North America. All of these projects apply land storage and most of them inject CO2 into the underground to enhance oil recovery rates. The projects participants are large energy enterprises, like BP, Total, and Shell. In recent years China has also made great efforts Table 1 CCS component

Capture

Transportation

Geological storage

Ocean storage Carbonate ore

in CCS development. The efforts include the ChinaEU Near Zero Emission Coal (NZEC) cooperation, the demonstration projects at Huaneng Beijing and Shanghai Shidongkou (2nd) heat and power plants, the pre-feasibility work for salt water reservoir storage of Shenhua Erdos Coal liquefaction project, and the research of CO2 injection into the underground to enhance oil recovery rates. The listing of CO2 capture projects shows that China pursued the development of post-combustion capture technology. Currently, none of the demonstration projects combines capture, transportation and storage in a complete integrative CCS system. The different components of CCS have different development levels (Table 1), the barriers of extensive application of CCS mainly come from: 1) high capture costs, as an emission reduction option CCS is unable to compete

Technology development of CCS system components

CCS technology Post-combustion Pre-combustion Oxygen enrichment combustion Industry separation (natural gas processing, ammonia production) Pipeline Shipment Enhance oil recovery Natural gas or petroleum reservoir Salty water reservoir Enhance coal bed methane (ECBM) Direct injection (lytic) Direct injection (lake type) Natural silicate ore Waste materials

CO2 industrial utilities

Worldwide developmenta 3 3 2 4 4 3 4 3 3 2 1 1 1

Development in Chinab 3 1 1 3 1 1 3 2 1 2 1 1 1

2 4

1 3

a The numbers 1 to 4 mean research stage, demonstration stage, economic feasible in given conditions, and commercialization, respectively. b The development stage in China has been estimated through news and information and other research outputs £ ¤ Zhang and Li, 2008 .

with renewable energy; 2) serious problems with transportation and storage remain unsolved, it is impossible to estimate the impacts which might occur; 3) CCS is a multi-component system, the imbalanced development of each component and a lack of integrated practical experiences have made CCS difficult to commercialise.

3 International regulations and policies on CCS CCS related regulations concentrate mainly on

CO2 transportation and CO2 storage. CO2 storage underlies international conventions and national laws and regulations. Currently the European Union (EU) has the most abundant regulations on CCS.

3.1 International conventions taking prudential attitude toward CCS Relevant international conventions on CCS can be divided into two parts. Firstly, there is the definition of CCS as an emission reduction option (United

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Nations Framework Convention on Climate Change, Kyoto Protocol). Secondly, there are the regulations on oceanic sequestration for captured CO2 (United Nations Convention on the Law of the Sea, London Convention). See details in Table 2. For the internaTable 2 Serial No.

1

2

3

4

Issue year

1972

1982

1992

1997

tional conventions taking prudential attitude toward CCS, on one hand, CCS research and development (R&D) are promoted through relevant regulations; on the other hand, CCS is not approved being included in emission reduction mechanism because of the high

International conventions related to CCS

Name

Parts relevant to CCS

China’s action

London

Establish the legality of CO2 sequestrate in the seas near continental shelf; amendment approved that industrial

Signed by China

Convention

captured CO2 can be poured into the sea, and allows that it can be stored in the seas near the continental shelf

United Nations Convention on the Law of the Sea

Applicable to the activities of CO2 storage under subsoil; under the guarantee of international laws and national laws, every country can sequestrate CO2 in the open sea

United Nations Framework

Promote sustainable management and cooperation to enhance carbon sink

Approved by China

Convention on Climate Change

and stock (4.1.d)

in 1993

Research, promote, development and enhance renewable energy use, CO2 sequestration and other innovation technologies which are helpful to the environment (2.1.a); Marrakech Agreement: encourage contracting parties to cooperate in development, promotion and transfer of fossil energy related GHG emission capture and storage technologies and engage IPCC to compile a technical document (5th/CP.7 agreement, 26th), about CCS (CMP.1.7th); Marrakech Agreement: cooperate in development, promotion and transfer of fossil energy related GHG emission capture and storage technologies (CMP.1.8th)

Approved by China in 2002

Kyoto Protocol

in 1985

Approved by China in 1996

Data sources: www.londonconvention.org; www.un.org/Depts/los/; www.unfccc.int; www.unfccc.int/kyoto − protocol/items/2830.php

uncertainty of the technology itself. Climate change regulations do not include explicit definitions on CCS. Considering the uncertainties of CCS technology and although UNFCCC and the Kyoto Protocol take CCS as an emission reduction option, they did not approve that CCS can be included in emission reduction mechanisms (at that time, Sleip3 ○ ner project in Norway had already been put into operation). Furthermore, different emission reduction 3 ○

mechanisms (CDM, JIT and ET) stated in the Kyoto Protocol did not include CCS either. So the definition of CCS technology will be an important question in future climate negotiations. International conventions do not include definitions on CO2 oceanic sequestration either. The United Nations Convention on the Law of the Sea has not defined the rights for maritime countries to store CO2 through pipelines at their exclusive economic zone and

Sleipner project began in 1996, it was the first CO2 storage project worldwide. It can store at average 1 million tons of CO2 per year

Ying Fan et al. / Analysis of Global CCS Technology, Regulations and Its Potential · · ·

continental shelf. Under the guarantee of international and national laws, every country can sequestrate CO2 in the deep ocean. In 2006, contracting states of the London Convention established the legality of CO2 sequestration in the seas near continental shelf, but this amendment did not mention whether CO2 can be in4 ○ jected into the ocean or not .

3.2 Promotion of CCS technology research in the USA and Australia The USA has made great efforts in CCS research, due to the USA government’s provision of 2.4 billion US$ from the economic stimulus plan to develop CCS technology. The American Clean Energy and Security Act also specifies that 26% of emission reduction subsidies for enterprises will be used for supporting CCS development and related projects (http://thomas.loc.gov/cgi-bin/query/z c111:H.R.2454). Furthermore, the USA did a general survey of its domestic geological salt water reservoirs through the establishment of the CCS state league. The Australian government started its “CCS Flagship Project” which provides 2 billion US$ for CCS research. The Global CCS Institute was formed in order to promote CCS development worldwide (www.globalccsinstitute.com).

3.3 Promotion of CCS policy development by the EU The EU has lead the CCS technology research and development, while it also actively proposes the implementation, institutionalization and standardization of relevant legislations for CCS (Table 3). The EU shows a radical attitude toward its CCS policy. On the one hand, CCS can help the EU to address climate change as for a sustainable use of fossil energy; on the other hand, the EU emphasises on CCS technology to keep its technical competence and benefits from CCS technology export in the future. The European Commission (EC), European Parliament, European Council and European Investment Bank (EIB) take great interest in CCS and rank CCS to the high4 ○

EAGHG. Greenhouse Issues. No. 84. 2006

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priority development technologies. But the member states still lack policies and incentives on CCS [EC, 2006a; 2006b; 2006c; 2007a; 2007b]. The EC has issued directives to establish a legal framework for CCS development. The EC takes CCS as an important emission reduction option, and defines CCS as one of three main projects (the other two are energy efficiency and renewable energy) which will improve energy security and address climate change with policy priorities. The EC issued the “Directive on the Geological Storage of Carbon Dioxide” in 2008, which served as the legal framework for CO2 geological storage. The directive specified that site selection for newly built power stations should favour CO2 capture, and all new built coal-fired power stations should be retrofitted with CCS after 2020, when 90% of emissions from these power stations need to be captured and stored. Other directives related to CCS include: requirement for CCS equipments (Directive 85/337/EC), requirement for storage sites (Directive 2000/60/EC, Directive 2004/35/EC), requirement for thermal power installed capacity (Directive 2001/80/EC), and requirement for energy efficiency (Integrated Pollution Prevention and Control Directive). The EC proposes to amend European Union Emission Trading Scheme (EU-ETS) in the 2012 longterm plan to cover CCS. Three amendments related to CCS are the explanation for the role of CCS, the definition of auction and quota, and to attract new entrants to finance CCS activities. The EC points out that the EU-ETS will be a key option to promote the development of CCS. In June 2009, the EC had issued “Emerging Policy Documents for CCS Demonstration in Developing Countries” which referred to the financial issues in the EU-China Near Zero Emission Coal Project. The EU has launched various kinds of incentives to promote the development of CCS. The EU incentive instruments can be divided into: reducing CCS’s operational cost (EC Guidelines on State Aid); serving additional value for CCS participants (environmental tax concession, project investment grants). The EC

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Guidelines on State Aid have mentioned that the subsidies for CCS will continue until 2015. Further, the EC is doing the evaluation on whether CCS subsidies Table 3 Policy classification

Industrial policies

Policies or regulations

Climate action and renewable energy package Proposal for a directive on the geological storage of CO2

Research policies

Competition policies

Formulate the regulations for storage sites, promotes CCS technology development, and support to demonstration projects Recommend specific policy to insure sustainable, safe and competitive energy supply. Speed up the development of cost effective low carbon technology

The Seventh Framework Programme (FP7)

Provide financial aid to research projects related to CCS Develop efficient capture technology (ENCAP) International cooperation: Carbon Sequestration Leadership Forum (CSLF), Cooperation Action within CCS China-EU (COACH), Support to Regulatory Activities for Carbon Capture and Storage (STRACO2 ), European CO2 Geography Network, zero emission for EU fossil power generations before 2020 (ZEP)

Research fellowship from member states Proposal for a directive on the geological storage of CO2 EU energy market reform

Export policies Support EU industry participants to access foreign markets On the review of the sustainable, development strategy — A platform for action

c Source

The EU policies on CCS

Specifics for CCS technology The results of impact analyses from the EC show that, if CCS can get comprehensive support and is proven to be safe, it can reach 15% of the total EU emission reduction target. The EC agrees to start CCS demonstration projects and provides financial aid to relevant research under the EU policy framework

Strategic energy technology plan

Zero emissions platformc

EU policy impact analysis and CCS

will offset the investment in energy efficiency and renewable energy. The EU has adjusted industrial policies to contain

UK: Near Zero Emission Coal (NZEC) Aims to avoid CCS been monopolized by some large enterprises of the EU. The Directive mentions that member countries should guarantee the potential use of the CO2 transport network and storage sites Power sector will be the major sector for CCS future application, the commercialisation of EU power sector may have great impact on CCS development In the future most CO2 emissions will come from China and India, so the EU promotes international cooperation. International cooperation will not only help addressing climate change, but also contribute to CCS technology development The EU always supports its industry participants to access foreign markets. Most projects will be implemented through international cooperation. E.g., Alstom, BP and SINTEF in EU-China Coach Project, Doosan Babcock Shell and BP are the participants in EU-China NZEC projects The EC pointed out that, when introducing renewable policy and CCS, it needs to be promoted at the highest level, raising public awareness, and speed up the decision making process

EU impact analysis (IA) system

2007, The IA had evaluated CCS technology and emphasises on the uncertainties in forecasting, interaction with renewable policies, impacts on energy portfolio and technology needs outside the EU

Strategic Environmental Assessment Directive

The method used to evaluate strategic environmental impacts of CCS application is uncertain

Environmental impact analysis (EIA)

EIA is aimed at specific project evaluation, and it has already been used to evaluate CCS demonstration projects

http://www.zeroemissionsplatform.eu/ Data sources: EC, 2006a; 2006b; 2006c; 2007a; 2007b

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CCS. During the industry policy adjustment process, the EU is urged to keep the leading status in CCS research and development, and speed up CCS commercialization, to benefit from the technology export to China, India and other developing countries. The 5 ○ “EU Flagship Project ” will be used to prove applicability of CCS technology in Europe and the global market. Supportive policies of CCS in EU member states are still lacking. Many restriction policies on CCS exist in EU member states. Some member states do not agree with the incentives proposed by the EU. Most member states refuse to use specified EU-ETS auction benefits for CCS development [de Coninck et al., 2008]. Poland emphasised that CCS has not been commercialized yet, while it may have great impact on the countries which rely heavily on coal-fired energy generation if CCS is included in EU-ETS. The diversity of each member state’s attitude toward CCS is a key barrier for the EU to establish a comprehensive policy framework for CCS. The EIB is interested in serving financial aid to institutions using CCS. CCS has been included in EIB’s sustainable development and climate change issues. Although currently the EIB does not provide a loan to institutions which use CCS, it is interested in supporting CCS demonstration projects. The EIB has also launched the “China Climate Change Framework” project which includes CCS. The potential benefit for CCS in this project is the possibility to form certified emission reduction.

3.4 Limitations in EU CCS policy The EU has many comprehensive CCS policies, but also shows limitations. CCS has not been commercialised yet. The asymmetric development of CCS components makes it hard to overcome these limitations. The EU is lacking risk management of storage sites. The Directive on the Geological Storage of Carbon Dioxide has mentioned that during the CO2 stor5 ○ 6 ○

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age period, if there is a CO2 leakage, the enterprise’s storage license will be revoked. But it does not guide enterprise’s responses when the leakage is happening. Furthermore, it is also lacking appropriate methods to evaluate the enterprise’s responsibility for the environment and climate change when the leakage is happening, which may increase the potential operational risk of storage sites. Increases in storage risk will aggravate the entire chains’ uncertainty from CO2 capture, transportation and storage. The government should not be the decision maker to choose which CCS technology option is preferred to develop. The budget for R&D can not fully support each potential CCS technology. Some CCS technologies have the same emission reduction potentials, not only the technologies which are nearly commercialised (e.g., post-combustion capture), but also the Chemical-Looping Combustion in Combination with Integrated Coal Gasification from ENCAP which is still under research. The government should not be the decision maker of CCS technology choices [Watson, 2008]. The EU has ignored the collaborative research which focuses on reducing CO2 concentration in the atmosphere, including: 1) directly capturing CO2 6 ○ from the atmosphere ; and 2) Bio-Energy for Carbon Storage (BECS). Considering the current situation of increasing coal consumption, it is necessary to prior discuss the sustainable use of fossil energy, which will not be enough if climate change is worsening [de Coninck et al., 2008; EUIAB, 2007]. There are limitations in CCS policy impact analysis. The IA is lacking the consideration of negative externality effects (e.g., IA only considers CO2 , SOx , and NOx ). There has been a large diversity among the evaluation results [EC, 2007c; Odeh and Cockerill, 2008; Viebahn et al., 2007]. There is also a lack of a sensitive analysis of fossil fuel prices in CCS IA. The IA Committee paid great attention to the CCS demand in the world market, especially in China and India [EUIAB, 2007]. But on the one hand, the climate change negotiations have not reached a final agreement, so it is hard to define the world wide

Extensive CCS demonstration project, which was raised by ZEP Directly capturing CO2 from atmosphere was started in the USA and it did not need to coupling to energy infrastructure [Keith et al., 2006]

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demand for CCS. On the other hand, China and India have specific barriers for CCS application. Shackley and Verma [2008] showed that India will not consider CCS until it is successfully operating in the USA and EU. So there will be no CCS export to India in the next 10–15 years, accordingly.

4 Comparison of emission reduction potential of CCS and other options In November 2009, China had issued its target for GHG emission control. In the year 2020, the CO2 emissions per capita shall be decreased to 40%–45% of the emissions per capita in 2005. If China wants to control GHG emission, it is necessary to change the economic structure, develop low carbon economics, and choose efficient emission reduction options with reasonable cost. As coal has dominated China’s energy consumption, CCS has the potential to be an emission reduction option for China.

4.1 Potential for emission reduction “Energy Conservation & Emission Reduction” belongs to the increasing energy efficiency options, renewable energy belongs to alternative energy options. CCS is designed for capturing GHG emissions from fossil energy consumption. Existing technology can capture 85%–95% CO2 emissions from emission sources. So if 50% of domestic thermal power can be retrofit with CCS, the power sector can reduce around 1 billion ton CO2 emissions at the level of 2005, it is nearly 20%–22% of total domestic fossil fuel consumption emission in 2005 [IEA, 2009]. CCS can insure continuous fossil energy consumption without emission of more GHGs. It is an attractive emission reduction option if the costs are not considered.

4.2 CCS technology gaps CCS shows technology gaps that can not be overcome immediately. 1) Compared with energy efficiency options, the thermal power of CCS will consume more energy in CO2 capture and compression, and will result in a decrease of energy conversion efficiency (domestic coal-fired generation efficiency will

decrease from 48% to 36% after retrofitting with CCS) [IPCC, 2005]. If 50% of domestic thermal power can be retrofitted with CCS, the power sector will consume an extra 65.27 milliion to 261.10 million tons standard coal, which accounts for 2.3%–9.2% of total energy consumption in 2005 [IEA, 2009]. This is contradictory to the “Energy Conservation & Emission Reduction” policy. 2) CCS is a period constrained emission reduction option. Compared to alternative energy options, CCS is designed for fossil energy emission reduction, and alternative energy can not only reduce emissions, but also can ease the crisis of fossil energy depletion. Alternative energy will be the main energy produced in the long term. 3) CCS technologies show several uncertainties and lack integrated practical experience.

4.3 CCS economic assessment Whether CCS can be a viable option depends mainly on its cost. Currently, the generating cost will increase a lot after retrofitting with CCS. Domestic coal fired power generation cost will increase by 2– 3 times after retrofitted with CCS. In 2005, the cost of domestic coal fired generation was 0.23–0.28 RMB (kW h)−1 , after being retrofitted with CCS the cost will increase to 0.4–0.8 RMB (kW h)−1 , while the generating cost of wind power is 0.35 RMB (kW h)−1 . Hence, CCS has a lower competitiveness than wind power. The cost estimation data comes from the IPCC [2005].

5 Conclusions and policy implications As a viable option to reduce the emission from fossil energy consumption [IPCC, 2007], CCS has the greatest potential for GHG emission reduction. The international community shows prudential attitudes toward CCS because of its asymmetric development. So China should consider prudential attitudes toward CCS too. (1) It is important to evaluate the negative impact of CCS application in China. Based on the results from EU CCS impact analysis, there has been a large diversity among the evaluation results, while the analysis lacks the consideration of negative externality

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effects as well as a sensitive analysis of fossil fuel prices. It is important to evaluate socio-economic impacts and domestic geological storage potential before an extensive application of CCS in China. CCS can be viewed as a viable option for China after its technical feasibility in China is proven. (2) Increasing R&D input in some key CCS technologies is essential, especially the CO2 capture part. Based on the analysis of EU industry and research policies, the EU increased the R&D input to CCS in order to keep its competitiveness, so it can benefit from future technology export. China needs to increase CCS technology R&D input in order to avoid paying a higher price to import CCS technology. On the one hand, it is important to reduce the cost of existing technology. On the other hand, it is also important to study other cutting-edge capturing technology (e.g., pre-combustion capture and oxygen enrichment combustion). (3) Incentives need to cope with the development of CCS. Because of CCS’s asymmetric development and lack of integrated practical experiences, there are some gaps in the EU’s CCS incentives (especially at the storage part). These problems need to be solved through increasing R&D input. So the government should first promote CCS R&D. After the technology has been developed, relevant incentives can be used to attract more enterprises to apply CCS. (4) Improving CCS technology and economic feasibility is very important for China. Increasing CCS technology and economic feasibility can increase CCS competitiveness to renewable power. Based on the results from IPCC and compared to newly built power stations with CCS, the retrofitting of existing thermal power plants with CCS will result in higher cost and lower energy conversion efficiency. In China, 70% of power generation comes from thermal power plants with most of them considered as newly built installed capacities. It is not possible to build new power stations to substitute existing thermal power plants. So, China should consider retrofitting existing thermal power plants with CCS. Acknowledgements This paper is supported by the National Natural Sci-

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