Supermajors Shell and ExxonMobil have joined China National Offshore Oil Corporation (CNOOC) to pursue a huge carbon capture and storage (CCS) project in Guangdong province, China’s southern economic powerhouse.
The memorandum of understanding signed on Monday will commit the trio and local Guangdong authorities to evaluate the potential for a world-scale CCS project to reduce greenhouse gas emissions at the Daya Bay National Economic & Technological Development Zone.
Initial assessments indicate the potential to capture up to 10 million tonnes per annum of carbon dioxide from Daya Bay’s industrial sector, supporting China’s ambition of carbon neutrality by 2060.
Following the MoU, the parties will seek to conduct a joint study to assess the technical solution, develop the commercial model and work with government to develop enabling policies.
In addition to assessing commercial CCS opportunities, the companies will evaluate carbon policy systems in China and propose policies for consideration that would support the deployment of CCS in Guangdong.
The project could also serve as a model for the chemical industry as one of the first petrochemical projects to be decarbonised.
“Collaboration with government and industry is an important part of unlocking future carbon capture and storage opportunities, with the potential for large-scale reductions of emissions from vital sectors of the global economy,” ExxonMobil Low Carbon Solutions president Dan Ammann said.
“Well-designed government policies will help accelerate the broad deployment of lower-emissions technologies in support of society’s net-zero ambitions.”
While renewable technologies are important to help reach society’s net-zero objectives, CCS is a safe, proven and consistent technology that can enable some of the highest-emitting sectors, such as manufacturing, power generation, refining, petrochemical, steel and cement industries, to reduce their emissions, ExxonMobil said.
Jason Wong, executive chairman of Shell Companies in China, said the country has “an ambitious decarbonisation path”, aiming to reduce carbon dioxide emissions from about 10 billion tonnes per annum to net zero within 30 years.
“A shift to cleaner energy sources and energy efficiency will not be enough,” he said.
“China will also need to actively remove emissions. This makes CCS an essential part of the solution for China to achieve carbon peak by 2030 and carbon neutrality by 2060,” Wong added.
Shell Emerging Energy Solutions executive vice president Anna Mascolo said: “The surging demand for CCS in China provides Shell with a substantial opportunity to grow its sectoral decarbonisation business.”
Shell said its CCS strategy is a key pillar of the company’s climate target to become a net-zero emissions energy business by 2050 and its ambition is to have access to at least 25 million tpa of CCS capacity by 2035.
CNOOC chairman Wang Dongjin said that CNOOC has worked out a net-zero action plan, trying to achieve a carbon emissions peak in 2028, two years head of the government target and carbon neutrality in 2050, 10 years ahead of the Beijing’s target.
The study for the CCS hub is another milestone for CNOOC to achieve its net-zero target, he said.
China has more than 40 carbon capture, utilisation and storage (CCUS) pilot projects with total capacity of 3 million tpa, many of which are small developments associated with enhanced oil recovery. This capacity will need to be scaled up significantly over the next four decades.
As many of the CCUS technologies in China are close to or have reached commercialisation, the main challenge lies in creating conditions to support substantial investment in large-scale CCUS, particularly as a solution to industrial decarbonisation.
Daya Bay National Economic & Technological Development Zone is located in the southern part of Huizhou in Guangdong, 76 kilometres from Hong Kong.
It is the only petrochemical base on the eastern coast of the Pearl River Delta, where Shell and ExxonMobil have partnered with CNOOC in investing and building huge facilities.