CCUS seen as smoother path to CO2 goals

In its bid to balance sustained economic growth with its pledge to achieve carbon neutrality before 2060, China is betting on a technology that traps and buries carbon dioxide emanating from fossil fuels via carbon capture, utilization and storage.

Faced with an energy system still dependent on coal and heavy industry — sectors difficult to decarbonize — Beijing and State-owned energy giants are channeling resources into CCUS, moving the nation rapidly from small pilot projects to the planning and construction of multi-million-metric-ton industrial clusters.

The push is formal and comprehensive. Beijing has integrated CCUS into its national 14th Five-Year Plan (2021-25) and recently updated its technology roadmap, defining CCUS technology as "crucial not just for the large-scale, low-carbon use of fossil fuels, but also a vital part of the overall technology mix needed to realize the goal of carbon neutrality".

For major industrial nations like China, CCUS is not optional. It is a vital safeguard technology to bridge the emissions gap. Without it, the 2060 target is effectively unreachable given our energy security demands, said industry experts and company executives.

Lu Junling, chief economist at the National Energy Administration, said CCUS has built an indispensable bridge between ensuring energy security and achieving carbon goals.

In recent years, the NEA has promoted CCUS to achieve a leap from exploratory beginnings and pilot experimentation to industrial demonstration and scaled development by strengthening policy guidance, accelerating technological innovation and deepening project implementation, Lu said.

"Moving forward, it is essential to accelerate planning and top-level design and initiate demonstration project construction, to provide support for green, low-carbon, high-quality development," he said.

The oil and gas industry is expected to operate over 90 CCUS projects this year. There are more than 10 CCUS-EOR (enhanced oil recovery) projects, and the annual carbon dioxide injection volume recently reached 4 million tons, Lu added.

The country's progress is visible in the rapid increase of project numbers and scale. As of the end of 2024, China had 126 CCUS projects planned or operational, with an annual capture capacity of 6 million tons and an annual CO2 injection volume reaching 4 million tons, led by the energy conglomerates.

China Petroleum and Chemical Corp (Sinopec), the country's largest refiner, operates the country's first CCUS initiative at the million-ton scale, capturing 1 million tons of carbon dioxide a year at its Qilu petrochemical plant in Shandong province and injecting it into the Shengli oilfield for EOR, a process that boosts oil production while permanently storing the carbon.

The project serves as an engineering benchmark, providing valuable experience and technical insights to support the large-scale rollout of CCUS initiatives nationwide.

As a green and low-carbon technology, CCUS plays a crucial role in promoting the transformation and upgrade of traditional industries and cultivating new quality productive forces, said Hou Qijun, chairman of Sinopec.

"The scale of CCUS demonstration projects that are operational and under planning and construction has clearly expanded, with multiple million-ton projects underway and planned," Hou said.

He said Sinopec has carried out a series of practices in the CCUS field and is willing to join hands with foreign partners to focus on technological breakthroughs, consolidate the industrial foundation and further promote cluster development.

China National Petroleum Corporation is forging ahead with ambitious CCUS hubs in the Daqing, Changqing and Dagang oilfields in Heilongjiang province, Gansu province and Tianjin, respectively, aiming to aggregate emissions from nearby power and industrial facilities.

Globally, the CCUS momentum is accelerating rapidly as nations recognize its role in the energy transition.

While much of the CO2 captured today is used for EOR, State firms are increasingly exploring dedicated geological storage in deep saline aquifers, particularly in coastal areas.

China National Offshore Oil Corp already has the country's first offshore carbon capture and storage demonstration project, injecting over 100 million cubic meters of CO2 into the Enping 15-1 oilfield in the Pearl River Mouth Basin in South China, and tapping into the vast storage potential of its continental shelf.

The project, which captures carbon dioxide and injects it into the oilfield to enhance oil recovery, demonstrates China's growing capabilities in CCS technology.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said the push for CCUS has transitioned from a niche research area to a cornerstone of China's climate strategy, driven by both State policy and corporate investment, signaling a profound commitment to meeting its ambitious mid-century goals.

China's reliance on fossil fuels, particularly coal, makes the large-scale deployment of CCUS indispensable for achieving net-zero emissions, Lin said.

"While the nation rapidly scales up renewables, CCUS provides a critical mechanism for deep decarbonization in sectors where emissions are hard to abate, such as power generation, cement and steel. This strategic deployment is beginning to show results on a global scale."

Analysis of the International Energy Agency's database shows that there are 1,017 CCUS projects globally at various stages, of which 62 projects are operational, with a capture and storage capacity of approximately 70.48 million tons per year.

Large-scale projects account for 42.7 percent of the total, and the capacity of projects at various stages is expected to increase to 450 million tons per year by 2035, it said.

China is rapidly closing the gap with global leaders in terms of project scale and numbers. The government is actively guiding this expansion through policy support and investment in major national projects.

The oil and gas sector has emerged as a major early adopter, leveraging CCUS for EOR, while simultaneously developing dedicated storage hubs.

Chen Qizhen, deputy director of the Administrative Center for China's Agenda 21, said there are currently 734 projects under planning, construction and operation.

Upon full completion, the annual capture capacity will exceed 500 million tons, marking CCUS's entry into a new phase of large-scale and diversified development, said Chen.

Domestically, technological readiness is also sufficient for scaled deployment, and China's CCUS technology has generally reached a demonstration level, Chen added.

Despite the progress, the global effort still faces a significant shortfall in meeting the goals set out in the 2015 Paris Agreement.

"Data from the COP30 meeting show that global emissions are expected to fall by 12 percent by 2035. However, this still falls short of temperature control targets of the Paris Agreement, and the challenges of technology, finance and capacity building remain severe," said Chen.

"Against this backdrop, the importance of CCUS technology is becoming increasingly prominent, underscoring the continuing need for China — with its vast industrial base and ambitious climate pledges — to accelerate its CCUS scale-up efforts as a global imperative."

Despite the State's determined push, the CCUS sector in China faces critical economic and logistical hurdles that must be overcome before it can operate at the scale required for climate neutrality.

To overcome these challenges, China is actively seeking international expertise. Partnerships with foreign oil majors like ExxonMobil and Shell are already underway to assess multi-million-ton hub concepts in large industrial parks across the country.

France's TotalEnergies has been involved in researching the development of CCUS technology related to refining, petrochemicals, power and other energy sectors in China.

It earlier signed a partnership agreement with CNPC to conduct extensive knowledge exchanges and cooperation in CCUS to address the changes and challenges in the energy and petrochemical industries.

London-based Shell is also looking to explore the feasibility of developing a CCS hub in the Daya Bay National Economic and Technological Development Zone in Huizhou, Guangdong province, aiming to capture up to 10 million tons of CO2 per year.

These international companies view China as a critical market for scaling their CCUS expertise, particularly in the creation of large-scale industrial hubs and offshore storage, said Lin.

"The updated CCUS roadmap includes targets to cut energy consumption, which signals a clear technological drive. China's sheer scale and centralized planning could turn it into a world leader in CCUS deployment, securing a key pathway for its climate goals while creating a new green industry," he said.