China’s new approach to cleaning its air

Mar 21, 2014
A laborer works at a coal mining facility in Huaibei, in northern China's Anhui province.

FORTUNE -- Lost in all the coverage of China’s air pollution crisis is that the country continues to build more coal-fired power plants -- with 363 new ones under construction at last count. You can’t blame the Chinese; they need all the energy they can get. They’ve been building out wind and solar power as fast as they can, but those sources still account for less than 1% of China’s power needs. The country has an ambitious nuclear program, but even that won’t solve the problem. If China keeps on its current course, by 2030 roughly two-thirds of its power will still come from fossil fuels, mainly coal.

This abundant fuel contributes heavily to both air pollution and climate change. Only one way exists to mitigate the negative impact of coal on global warming -- a technology called CCUS for carbon capture useable storage. This process involves capturing the carbon and other pollutants at the source and piping them underground where they will be stored permanently. The “useable” part means injecting CO2 into oil wells where it will help recover reserves otherwise difficult to extract. These systems can also be designed with technology to clean up sulfur, soot, and other forms of air pollution.

We already know how to store carbon -- oil companies have been using the technology for years to suck the last few barrels out of nearly tapped fields. What’s not known is which technology will work best -- and most economically -- to capture the CO2 as it’s being generated by the coal plant.

MORE: China's rich make plans to avoid smog

So the question becomes, Who is going to spend the billions needed to build and test the technology on a large scale? At a conference at The Wilson Center in Washington, D.C., last week, a panel of energy experts argued that after years of slow progress and false starts, carbon capture technology is finally gaining traction in some parts of the world.

Julio Friedmann, the Deputy Assistant Secretary for Clean Coal, Office of Fossil Energy at the Department of Energy, says worldwide some $4.5 billion is being invested in CCUS with the U.S. DOE spending $400 million on R&D for the technology. China especially is now stepping up to the plate. Friedmann says the country wants to employ CCUS technology because its leaders, many of whom are engineers and are aware of the science of climate change, now recognize its importance. “The debate over whether to do CCUS is done,” he says. “The debate now is about costs and timing.”

According to the global CCS Institute, China has one of the biggest carbon capture pilot programs in the world. (The U.S. is another big player.) As of February 2014, the Institute recorded 12 large-scale projects in China, double the number of projects in 2011.

China’s giant state-owned power-generation, coal, and oil companies are taking the lead on these projects, and many also involve major international partners. “If CCUS is to succeed, the U.S. and China must share more technical information on clean-coal technology,” says Ming Sung, the Clean Air Task Force’s Chief Representative for the Asia Pacific. Ming has been at the forefront of efforts to accelerate cleaner coal efforts by helping to forge partnerships between leading energy firms from China and the West. “The U.S.,” he says, “is more innovative and has better management systems, but China can do things cheaper and quicker.”

Let’s hope he’s right, because the climate clock is ticking.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions