China’s top steelmaking companies are holding talks with Australian experts in Beijing this week on the introduction of carbon capture and storage technology as a crucial contribution towards helping the country meet carbon emission targets.
Half of the world’s steel is made in China and emissions from industry — excluding the energy sector — contribute about a quarter of all global carbon dioxide emissions.
That is why the conference at Peking University of 100 delegates from the steel industry, from universities and from the Chinese government could prove a turning point towards meeting the Paris climate change targets, says Alex Zapantis, Asia-Pacific manager of Melbourne-based Global CCS Institute.
Participants at the conference include Baosteel, Shougang and Hebei Steel, as well as the overarching China Iron and Steel Association.
Fiona Wild, vice-president for sustainability and climate change for BHP Billiton, which is investing $9.5 million to foster carbon capture and storage knowledge via Peking University, says the program aims to “create a step change in the development and deployment of this critical technology”.
The world’s first large-scale CCS facility at a steel plant began operating late last year in Abu Dhabi.
Last month Yanchang Petroleum, China’s fourth largest oil and natural gas producer, launched China’s first major CCS project, capturing 400,000 tonnes of CO2 from one of its chemical works and transporting it to a nearby oilfield where it is injected into the rocks to release and replace “trapped” oil.
The Global CCS Institute has provided consulting advice to Yanchang. The institute, a world leader in CCS research and information, also has offices in Washington, Brussels, Beijing and Tokyo.
Seven other substantial CCS projects are under consideration in China. Globally, 17 such facilities are in operation, with five more coming on stream over the next year.
Zapantis says the technology is “very well proven, safe, reliable and understood. The challenge is commercial.”
It costs about $27m to install a CCS facility at a steel plant with a capacity to capture 100,000 tonnes of CO2 a year. It takes about two tonnes of CO2 to produce a tonne of steel, and unlike energy — where there are alternatives — it is an irreplaceable part of the process.
Zapantis says: “Of course additional costs are not welcome in any industry, that’s understandable. But the capital cost is coming down rapidly” — in a recent case, by 30 per cent over three years, as the technology is finetuned.
But companies are starting to accept that regulatory and other changes will make it more expensive to do nothing. As at Yanchang, CO2 can be transported — preferably by pipe but also by truck — to where it has value.
The Chinese government is strongly supportive, Zapantis says, and is looking at ways to drive the technology forward. If either nuclear energy or renewables are removed from the cost equation for reducing carbon emissions to the Paris targets, this will cost an extra 6-7 per cent. If CCS is removed, Zapantis says, it will cost a further 138 per cent.
“It’s not a silver bullet but it is an essential part of the mix if targets are to be achieved at the lowest cost,” he says. It needs to be applied to other industrial processes as well, he says, such as making cement and plastics.
China is starting to move into a leadership position in deploying CCS because it is starting to realise that without deploying the technology, the cost of reducing emissions will be far greater, relying only on other routes including installing more renewables.
