US-China Clean Energy Cooperation and CCS

On January 18, at a ceremony at the US-China Strategic Forum on Clean Energy Cooperation in Washington, D.C., U.S. Department of Energy Secretary Steven Chu and China’s Energy Minister Zhang Guogao and Science and Technology Minister Wan Gang signed an agreement to advance the US-China Clean Energy Research Center (CERC). The agreement was announced as part of a “new era” of clean energy cooperation, as Jon Huntsman, U.S. Ambassador to China, put it at the event.

The U.S. and Chinese governments have been cooperating on clean energy technologies for decades, but the CERC program arguably represents a fundamentally new way of working together. In the past, collaboration on clean energy has taken place on a government-to-government, academic-to-academic, and business-to-business basis. But this program integrates activities into what both sides have said they wanted for a long time – a genuine public-private partnership.

The program— funded by a bilateral $150 million in public-private funding— includes research groups, or “consortia,” focused on building efficiency, electric vehicles, and advanced coal technologies, including carbon dioxide capture and storage (CCS). Each consortium is led by a research institution and includes private sector partners— and the World Resources Institute is one of groups focusing on advanced coal and CCS.

The collaboration is significant since both countries face critical choices in their energy mix, and technology and policy choices. Both countries continue to be heavily dependent on coal, as the top two coal consumers in the world. And, both countries stand to benefit from the experience and lessons of this collaborative initiative.

China and Coal

While China has made advancements in renewable energy and energy efficiency production, it still relies on coal as its main energy source. Last year, China was the world’s leading coal consumer, using 3.5 billion short tons of coal (2009 data, EIA). And, although China produces most of its own coal, as the New York Times recently pointed out, China is now importing major amounts from other countries, including the United States— from which it brought in some 2.9 million tons in the first six months of 2010 alone.

The United States also uses large amounts of coal—1.4 billion short tons (2009 data, EIA). Although coal production and use is declining in the United States, it continues to be a major aspect of the country’s energy mix.

China’s coal dependence will continue into the foreseeable future, especially as its economy becomes more modern and the country provides its people a higher quality of life. Estimating China’s long-term coal use is difficult because it continues to make policy and technology changes to cut its growth. According to the U.S. Energy Information Agency’s estimate, China’s use of coal in the electricity sector will increase from 27.7 quadrillion Btu in 2007 to 72.2 quadrillion Btu in 2035 (based on a “business as usual growth”)— which is an average rate of 3.5 percent per year.

China and CCS

In order to meet its growing energy demands, yet constrain its emissions– both traditional air pollutants and greenhouse gases– China has been working to substitute non-coal energy sources, use coal more efficiently, and address its emissions directly. These efforts include increasing energy efficiency, deploying nuclear and renewable energy, and implementing carbon dioxide capture and storage (CCS).

If China is going to meet its emissions targets in the future, many analysts and academics agree that CCS will be needed. Even with advances in efficiency, renewables, and nuclear energy, without CCS, China’s emissions would stabilize around 2030, but would not actually decline. (See: The China Human Development Report 2009/10.)

These modeling efforts, however, assume that CCS technology will be available and implemented at a much greater scale than is currently available. Researchers, including members of the CERC, are evaluating ways to reduce the energy and water penalties associated with the CCS and to ensure that it can be deployed widely.

That’s why the the CERC represents an important pilot project. The joint work plan announced for the advanced coal technology consortium features on-the-ground collaboration and research around existing complementary demonstration projects. The U.S. funding goes to researchers in the United States who will be working with their Chinese counterparts who focus on the same issues in China.

Both Countries’ Interest

In his opening remarks at the Clean Energy Forum, Zheng Bijian, Chairman of the China Institute for Innovation & Development Strategy, reminded participants that Chinese investment in the United States surpassed United States investment in China last year. The countries’ economies are increasingly interdependent – as are the energy and environmental challenges they face. Zheng said, “It is both necessary and possible to work together,” and he spoke of a future where our two countries find and foster “communities of common interest.”

Reducing emissions, shifting to cleaner energy sources, and implementing advanced coal technologies are clearly areas of common interest to the United States and China. The CERC serves a prime example of joint collaboration to advance clean energy development and deployment.