Summary/Abstract
This work package proposes a regulatory framework to help overcome the major obstacles to CCS deployment in the PRC. Chapter 1 examines the regulatory and policy framework currently established internationally, noting the different command-and control, market-based and voluntary approaches. Following this review, Chapter 2 outlines the current regulatory gaps within the PRC and explains the need for additional CCS regulation in the PRC. Based on the gaps identified, Chapter 3 explores a series of regulatory support policies and mechanisms that the PRC could implement to help facilitate CCS development. This involves the construction of technical and management standards for all elements across the CCS value chain (capture, transport and storage) and suggestions for ensuring efficient public engagement through effective education, requiring meaningful disclosure from project proponents and providing public engagement platforms that allow community concerns to be heard and responded to.
The issue of a lack of commerciality and financeability for CCS projects is addressed in Chapter 5. The chapter notes that some CCS applications, such as those in the coal chemicals sector involving the sale of waste CO2 for enhanced oil recovery (EOR), can theoretically be deployed today with little or no direct financial aid, most coal-based power sector technologies face financial constraints due to the incremental costs from CO2 separation and the energy penalty associated with the capture and compression processes. Government support is therefore necessary to ensure the viability of early mover CCS projects.
Chapter 5 presents both qualitative and quantitative analyses of series of potential complementary support measures policies, providing examples of international and domestic precedents where appropriate. The chapter notes that that the use of multiple financial policy levers can be used in conjunction to effectively bridge the commerciality gap for early mover projects. Finally, Chapter 6 identifies the major commercial counterparty risks within the CCS value chain and proposes a model for risk sharing that involves the government partially underwriting by government of revenue and certain counterparty risks.