China Energy has started construction of the largest carbon capture project in the country and plans to have it operational in 2023.
It will be located at the Taizhou Power Plant in Jiangsu Province with a planned capacity of 500,000 tons of carbon annually.
The main use of the captured carbon will be for enhanced oil recovery (EOR), an activity many see as perpetuating the dependence on oil, without a meaningful reduction of CO2 emissions.
“Our production cost is 250 yuan ($39.27) per ton while the CO2 price in surrounding areas can reach about 300 yuan per ton. The profitability of the whole project is strong,” an official of the project told CMG.
The carbon capture plans of the largest state oil company Sinopec have also been shared – the company will build CCS installations in the Jiangsu Oilfield and use it for EOR.
This approach will help the country reduce its dependence on foreign imports of oil and tap into the 10 billion tons of oil it has in its geological reserves.
The aforementioned carbon price comes for China’s carbon market, which was launched back in July.
Initially, the carbon market covered around 2,2000 companies responsible for ~40% of the country’s emissions.
Each company received an initial fixed amount of allowances but there was no actual cap on how much emissions could be produced by each company.
Trading on that platform has increased recently after the Ministry of Econology and Environment issued an order to all cities and provinces to ensure all industrial plants use up their emission allowances before the end of the year.
China’s carbon market is reported to be the largest in the world and last Friday saw a record turnover of 7.52 million tons of carbon emissions quotas at around 42 yuan per ton.