Regional: Promoting Carbon Capture and Storage in the People's Republic of China and Indonesia

Sovereign Project | 48282-001

Summary

The Country Partnership Strategy 2009-2013 of PRC underscores the need to resolve climate change issues and explore opportunities for clean development mechanisms. The Country Partnership Strategy 2012-2014 of INO explicitly outlines that ADB support to the country will include ongoing dialogue and policy advocacy with the government to promote the scale-up of carbon capture and storage. PRC is the largest emitter of CO2 in the world, and INO is the 15th largest

The impact of the TA will be reduced CO2 intensity and increased deployment of CCS technology in PRC and INO.

The outcome of the TA will be a well-established institutional capacity for CCS research and capacity development in areas of technology innovation, policy development and formulation and financial mechanisms.

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Project Name Promoting Carbon Capture and Storage in the People's Republic of China and Indonesia
Project Number 48282-001
Country Regional
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8714-REG: Promoting Carbon Capture and Storage in the People's Republic of China and Indonesia
Carbon Capture and Storage Fund US$ 1.80 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector Energy - Energy sector development and institutional reform
Gender Equity and Mainstreaming No gender elements
Description

The Country Partnership Strategy 2009-2013 of PRC underscores the need to resolve climate change issues and explore opportunities for clean development mechanisms. The Country Partnership Strategy 2012-2014 of INO explicitly outlines that ADB support to the country will include ongoing dialogue and policy advocacy with the government to promote the scale-up of carbon capture and storage. PRC is the largest emitter of CO2 in the world, and INO is the 15th largest

The impact of the TA will be reduced CO2 intensity and increased deployment of CCS technology in PRC and INO.

The outcome of the TA will be a well-established institutional capacity for CCS research and capacity development in areas of technology innovation, policy development and formulation and financial mechanisms.

The TA will have four components. It will (i) conduct research on CCS technology development and deployment with partners; (ii) promote knowledge sharing through conferences, workshops, dialogues, study visits, fellowships, and other forms of regional cooperation; (iii) strengthen collaborative partnerships with centers in and outside the region; (iv) foster leadership in capacity development, including government policy and regulatory system establishment for CCS.

Project Rationale and Linkage to Country/Regional Strategy

The IEA Carbon Capture and Storage (CCS) Roadmap highlighted the significant role that CCS will need to play in achieving an atmospheric CO2 concentration stabilization of 450ppm by 2050. In the scenario it is based on, CCS will provide approximately 14% of the total CO2 emissions reductions out to 2050. Achieving this contribution of emissions reductions will require an ambitious CCS growth-path, with 100 projects needed globally by 2020 and over 3,000 by 2050. In both 2020 and 2050 major developing countries, including the People's Republic of China (PRC) and Indonesia (INO), will need to contribute to carbon capture and storage (CCS) deployment.

PRC's continuing economic growth is projected to drive surging energy consumption for the next several decades. With 70% of PRC's primary energy coming from coal, and the expectation that this reliance on coal will persist for decades to come, PRC will likely continue as one of the world's largest GHG emitters for some time. Coal reserves in PRC are vast and account for over 5,500 billion tons, with proven reserves of 189 billion tons that can supply its projected requirements for over 70 years. Therefore, wide deployment of CCS in PRC over the long term will be necessary to significantly reduce national emissions.

Indonesia has a heavily fossil-fuels based economy, consuming coal, oil and gas produced domestically plus imported petroleum. As the world's largest coal exporter and a substantial LNG exporter, and confronted by increasing CO2 emissions from growing domestic consumption of its indigenous coal and fossil fuels, Indonesia has significant requirements for the deployment of large scale low carbon technology in the long term. Moreover, the Government of Indonesia has been increasingly vocal about climate change and its impacts on the developing world. The government has pledged to achieve a non-binding commitment to reduce country emissions by 26% in 2020, and has stated that this target would increase to 41% if international financing was to become available.

While CCS-related activities have been going on in PRC and more recently in Indonesia, much still has to be done to speed up the process of moving large-scale CCS from R&D to commercial stage. There are a range of activities underway in both countries, but mostly these are uncoordinated and fragmented in approach; in the main, initiatives have been focused on specific projects or technologies, rather than on a broader strategic view of best technologies, national CCS planning requirements, enabling regulatory and policy environments, environmental and social impacts, and financial mechanisms. Moreover there remains no single source of comprehensive data and information on CCS activities in PRC or INO.

To address this information need and create a stronger strategic architecture for future CCS initiatives, ADB proposes to establish a CCS research program under this R-RDTA that will be administered by two research centers in PRC and one in INO, together forming a new CCS Center for the two countries. With support from the ADB, the CCS Center and its partners will conduct research to develop CCS technologies in the region and organize activities to develop the capacity to enable widespread deployment of CCS in both countries and the region within next decade. Program activities will benefit from strategic direction provided by ADB (through its Energy Community of Practice) and the Clean Energy Financing Partnership Facility. The research scope is to examine issues involved with integration of CCS into the power and industry sectors of both countries, and will be comprehensive, covering key dimensions, economic, policy and technology, aiming to build the level of consensus on the role of CCS as a promising option for addressing greenhouse gas issues from increasing use of fossil fuels.

This program will also enable the center to join forces with partner institutes and centers in the region and to facilitate the creation and functioning of an international network of CCS researchers that will update technology and policy development status. This joint effort will build on the earlier part-time research work by ADB and knowledge partner organizations. One such organization is the UK Carbon Capture and Storage Research Centre at the University of Edinburgh of United Kingdom, which is already active in pursuing partnerships for CCS development in PRC and is involved in design of a demonstration project near Guangzhou (the China Resources Haifeng Power Plant).

The program will form an important part of the knowledge platform that ADB is building with the PRC.

Impact Reduced CO2 intensity and increased deployment of carbon capture and storage technology in the People's Republic of China and Indonesia
Project Outcome
Description of Outcome Well-established institutional capacity for CCS research and capacity development in areas of technology innovation, policy development and formulation, and financial mechanisms.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Improved R&D activity on CCS in PRC and INO, with three CCS Centers of Excellence established.

2. Increased knowledge sharing through conferences, workshops, dialogues, study visits and other forms of regional cooperation;

3. New collaborative partnerships built with centers in and outside the region

4. Foster leadership in capacity development, including government policy and regulatory system establishment for CCS.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

1. Three consulting firms (49 person-months of inputs per firm, 147 person months total)

2. Two individual consultants (international, 12 person-months; and national, 24 person-months)

Each consulting firm will require a total of 13 person months of international consulting inputs and 36 person months of national consulting inputs.

Responsible ADB Officer Aiming Zhou
Responsible ADB Department SDCC
Responsible ADB Division SDAS
Executing Agencies
Asian Development Bank6 ADB Avenue, Mandaluyong
Metro Manila, Philippines
P.O. Box 789, 1099 Manila,
Philippines
Timetable
Concept Clearance 18 Jun 2014
Fact Finding -
MRM -
Approval 29 Aug 2014
Last Review Mission -
Last PDS Update 09 Jul 2014

TA 8714-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Aug 2014 - 29 Aug 2014 31 Jul 2017 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,800,000.00 0.00 0.00 0.00 0.00 1,800,000.00 29 Aug 2014 0.00

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