5.2 Status of CCS in developing countries

Of the 75 LSIPs identified around the world in this report, 17 are in developing countries. This is an increase of five since 2011.

There are at least 19 developing countries engaged in CCS activities. Activities in these countries range from capacity development, pre-investment, and planning activities, and in two cases it involves operation of a CCS project. Most of these 19 countries are at an early stage of scoping out the opportunities and potential for CCS. There is a growing awareness of CCS as a potential mitigation technology within developing countries, especially by those which have a heavy reliance of fossil fuel based energy and industries. This growing awareness and importance has been facilitated by the inclusion of CCS in the UNFCCC’s CDM.

The CCS development lifecycle represented in Figure 47 is a tool developed by the Global CCS Institute to help conceptualise different stages of CCS development. This tool helps identify what sort of capacity development and pre-investment activities are relevant for a country based on where they are in the lifecycle. The lifecycle is split into five major stages, and the rotating circles imply that moving through the different stages is an iterative process and not necessarily linear. In fact, it can be seen that some countries are operating in different stages, sometimes concurrently, driven by their own needs, interests, approaches, and projects.

Figure 47 identifies what sort of activities a country has undertaken or is undertaking. The purpose of the figure is to provide an overview of the key types of activities being undertaken at a country level. It should be noted that different sectors within individual countries will be at varying stages of the lifecycle.

While most developing countries are still at the early ‘scoping’ stage, there are some developing countries which are further along the development lifecycle, notably Algeria, Brazil, Mexico, South Africa, the UAE, and China.

The In Salah project in Algeria, which is a gas processing project, started injecting CO2 in 2004. More than 3 million tonnes of CO2 have been stored in a deep saline aquifer (more than 2 km underground) so far. The natural gas extracted at the site contains a small percentage of CO2; this CO2 needed to be separated out of the gas stream to ensure purity standards for sale. The two original partners in the project, BP and Sonatrach, decided to invest US$100 million to store the CO2 geologically, rather than just vent it, thereby making a valuable contribution to the demonstration of CCS and its monitoring, measurement, and verification (MMV).

In Brazil, Petrobras has reported that the Miranga CO2 Experimental Site sequesters close to 200,000 t of CO2 per annum, work which is being undertaken on a commercial scale. Petrobras plans to sequester CO2 at the Lula oil field as part of an EOR project. This project is part of a plan by Petrobras to invest in 2–4 large-scale CCS demonstration projects as part of its sustainability and climate change plan.

Mexico has made significant progress in 2011–12 in putting CCS on its policy agenda. The development of a National CCUS Strategy and Regulatory Framework was identified as a goal in Mexico’s National Energy Strategy 2012–26 which was presented to the Mexican Congress in March 2012. Mexico also released a country-level storage atlas in May 2012 and is now focusing on developing a regional atlas. In addition, the country is undertaking scoping studies for a CCS demonstration project. Mexico has a high potential for EOR, and there is recognition of a synergy between achieving low-emission goals (especially from the power generation sector) and increasing yields from aging oil and gas fields.

South Africa is committed to addressing climate change while continuing to improve access to household electricity, address energy security, and alleviate poverty. They recognise that the negative impacts of climate change will ultimately cost more and have a bigger negative impact, especially on the poor, than the cost of addressing climate change. With the majority of South Africa’s GHG emissions coming from the energy industry, CCS has been identified as a key technology that can help achieve CO2 emission reduction goals. As such, South Africa’s National Climate Change Response Policy, which was endorsed by its Cabinet on 12 October 2011, identifies CCS as one of South Africa’s eight Near-term Priority Flagship Programmes. South Africa is currently focusing on a number of planning and enabling activities to facilitate the implementation of a CO2 test injection project. These activities include evaluating its regulatory framework, creating a public engagement strategy, and undertaking a technical feasibility study.

As discussed in more detail in Chapter 2, the UAE has three LSIPs in the planning and development stage. The plan is to use the CO2 captured from a network of projects for EOR.

There is a growing recognition in China of the importance of CCS as part of a portfolio of solutions for reducing the country’s GHG emissions from its large and rapidly expanding power generation and other coal-based industries. The past 18 months have seen a number of important developments regarding CCUS in China, particularly on policy and projects, and active involvement and support from the Central Government.

FIGURE 47 CCS development lifecycle

China is now clearly transitioning from purely focusing on CCS R&D to taking steps towards creating an enabling environment for the demonstration and deployment of CCS.

In March 2011, the National Development and Reform Commission (NDRC) issued China’s Notification on Orderly Development of Coal-Chemistry, which requires all new coal-chemical demonstration projects to be capable of substantially reducing CO2 emissions. This means that newly-built coal-chemical demonstration projects will need to consider installing technologies such as large-scale CCUS facilities in order to control their CO2 emissions.

In March 2011 the Chinese Government issued its much-anticipated 12th Five-Year Plan (2011–15) (FYP), a blueprint outlining the key economic and development targets for the country. Unlike previous plans, there is considerable focus on energy and climate change and plans for a slower and more sustainable growth trajectory. The key targets to reduce China’s GHG emissions under this plan include:

  • reducing carbon intensity (CO2 emissions per unit of GDP) by 17 per cent;
  • reducing energy intensity (energy consumption per unit of GDP) by 16 per cent; and
  • increasing the share of non-fossil energy to 11.4 per cent.

Following the release of the national 12th FYP, in November 2011 the NDRC issued the 12th Five-Year Work Plan on Controlling GHG Emissions. This work plan outlines China’s goal of developing new CCUS technologies and indigenous intellectual property rights. It includes broad goals to develop the technology across a range of sectors including thermal power, coal-chemical, cement, and steel. It also states China’s plans to develop fully integrated CCS demonstration projects with the captured CO2 to be used for EOR or for geologic storage. More recently, in March 2012, NDRC issued the 12th FYP on Coal Industry Development, which states that China will support research and demonstration of CCUS.

For the first time, the recent period has also seen strong public endorsements of CCS from a number of senior Chinese leaders, including from the NDRC Vice Chairman, Xie Zhenhua, at a CCS Conference in July 2011. In March 2012, senior NDRC leaders reinforced China’s commitment to developing CCS with the signing of the MoU with the Global CCS Institute to strengthen the parties’ cooperation on CCS.

Coinciding with these positive policy developments is a recent increase in the number of LSIPs in China. In the 2012 project survey, five new LSIPs were recorded in China, bringing the total number of China’s LSIPs to 11.

Appendix G summarises some of the specific activities that have been undertaken in the 19 countries identified.