On May 28, 2022, AAIA hosted a webinar about the history, technological advancement and investment trends of carbon neutralization. The speakers are Dr. Liwei Zhang, researcher at Wuhan Institute of Geomechanics, Chinese Academy of Sciences, and Dr. Zhaoyi Fang, president of the Chinese Environmental Scholars and Engineers Association..
Background
Dr. Liwei Zhang is Researcher at Wuhan Institute of Geomechanics, Chinese Academy of Sciences. Dr. Zhang received his B.A. from Harbin Institute of Technology and his M.S. and Ph.D. degrees in Civil and Environmental Engineering from Duke University and Carnegie Mellon University, respectively. In 2017, he was selected to be part of the Overseas High-level Talent Recruitment program, and since 2017, he has been a researcher and doctoral supervisor at the Energy and Waste Underground Storage Research Center of the Wuhan Institute of Geomechanics, Chinese Academy of Sciences. He focus on the research of the corrosion of underground cement structures in the CO2 geological environment, the risk assessment of the geological utilization and storage of carbon dioxide, the influence of chemical reaction processes on fluid flow in porous media, as well as the numerical simulation of the coupling process of chemical reaction-fluid mechanics.
Dr. Zhaoyi Fang is the President of the Chinese Environmental Scholars and Engineers Association. Ms. Fang is currently enrolled in a master’s degree in sustainability and management at Columbia University. She graduated from the University of Washington (UW) with a bachelor’s degree in Environmental Studies. She established student clubs during her time on campus to focus on supporting and enhancing sustainable development. In December 2017, she participated in the academic exchange activities of sustainable development collaboration between UW and the School of Environmental Studie of Tsinghua University. In 2018, he interned for U.S. Environmental Protection Agency (EPA) for half a year, where she was responsible for quantitative and qualitative data analysis of the brownfield grant approval process. Since the beginning of 2022, she has been the president of Chinese Environmental Scholars and Engineers Association (CESPN).
Lecture Content
What is Carbon Neutrality?
Greenhouse Effect was first proposed by the French physicist Fourier at the beginning of the 19th century. By the end of the 19th century, the Swedish chemist Alenius systematically elaborated on the causes for the Greenhouse Effect. The absorption of long-wave radiation of the ground by CO2 and water vapor increases the likelihood of changes of surface temperature. Since then, the problem of global warming was gradually recognized by the academic community. By the 20th century, the correlation between the increase in atmospheric carbon dioxide concentration and the rise of surface temperature and was further verified by multiple parties. Given the increasingly significant Greenhouse Effect and the evolution of Global Warming into a Climate Crisis, the concept of “Carbon Neutrality” was formed, where the amount of greenhouse gases entering the atmosphere is balanced with the amount removed from the atmosphere.
What is the Development of Carbon Neutrality Like?
From the Kyoto Protocol in1995 to the Paris Agreement in 2015, the concept of Carbon Neutrality was gradually established after a series of meetings and discussions. After the Paris Agreement, many countries and regions, including the United States, Japan and the European Union, have also expressed a timetable for Carbon Neutrality, which is planned to achieve Carbon Neutrality around 2050.
In 2020, President Xi Jinping proposed in his speech at the general debate of the United Nations General Assembly that China would strive to achieve Carbon Neutrality by 2060, and China’s Carbon Neutrality goal has also played a huge role in promoting China’s Carbon Neutrality and development.
What are the Carbon Neutrality Related Technologies?
There are many solutions to achieve Carbon Neutrality, which can be roughly divided into three categories from my personal point of view: the efficient use of renewable energy and large-scale renewable energy storage technology, green development and low-carbon utilization technologies for fossil fuels, as well as carbon dioxide capture, utilization and storage (CCUS).
What is the Current Maturity of the Relevant Technologies?
Technology #1: Efficient Use of Renewable Energy with Large-Scale Renewable Energy Storage Technologies
Currently, renewable energy mainly refers to wind and solar energy. With the significant reduction in the cost of wind and solar power generation, large-scale deployment of wind and solar power generation around the world has become possible. However, there is a problem of discontinuity in wind solar power generation, which will be greatly affected by the surrounding environment. For example, the solar power is sufficient during the day, but at night the power supply will encounter challenges.
Therefore, solar and wind power generation systems need power management technology – in the case of excess electricity, it can be stored, and when the power is insufficient, it can be released. The current energy storage technology still needs further development. While other renewable energy sources, such as biomass energy, geothermal energy, they are currently in a relatively small application range and have a low maturity for wide application.
What are the Solutions to the Problem of Renewable Energy Storage?
To solve the problem of energy storage of renewable energy mentioned above, the Chinese Academy of Sciences has developed a solution to the use of carbon dioxide as a medium for compressing energy storage. The solution is simply to purchase carbon dioxide captured by coal-fired power plants for power management through renewable energy power plants, which reduces the cost of carbon dioxide capture in coal-fired power plants on the one hand, and enables renewable energy power plants to obtain the energy storage medium required for power management on the other hand, reducing energy storage costs. In this way, the carbon dioxide emitted by coal-fired power plants can be coupled and solved with the problem of peak regulation difficulties faced by renewable energy generation fluctuations.
Technology #2: Green Development and Low-Carbon Utilization of Fossil Fuels
It is important to improve energy efficiency, thereby reducing the reduction of carbon dioxide emissions per unit of energy generated. For China’s national conditions, the early stage will be the main contributor to carbon emission reduction, and there is still room for improvement, but the contribution to emission reduction will gradually decrease with time. In addition, switching from coal to gas, coal + biomass blending to produce syngas (IGCC power plants) and underground in situ coal gasification technology are all through the green development of fossil energy and low-carbon utilization technology to achieve carbon emission reduction. In terms of maturity, both improving energy utilization efficiency and switching from coal to gas have reached a high maturity, coal + biomass mixing to prepare syngas is medium maturity, and underground in situ coal gasification technology maturity is low.
Technology #3: Carbon Negative Emission Technology, Carbon Dioxide Capture Utilization and Storage (CCUS)
This technology refers to the industrial process of CO2 emission reduction by CO2 capture, utilization and storage (CCUS) refers to the separation of CO2 from industrial emission sources or directly utilization or storage. For a country like China, which is dominated by chemical energy, CCUS is an important means for China to reduce CO2 emissions, ensure energy security and achieve sustainable development in the future.
Does China Have Enough CO2 to Address Storage Capacity?
China has plenty of room to absorb the large amounts of carbon dioxide it emits each year. Ideally, China’s oil and gas fields and deep brackish water layers could store China’s total CO2 emissions for 131 years. According to the data form Wei et al. (2013), China’s CO2 geological storage capacity is 1,573 billion tons (50% confidence interval), while China’s CO2 emissions in 2021 are about 11.9 billion tons (based on IEA data). Up to now, China has more than 40 CCUS demonstration projects.
What are the New Technologies in CCUS?
- New technology for carbon dioxide capture: Direct air capture (DAC) captures carbon dioxide directly from the atmosphere and then transfers the captured carbon dioxide Technology that utilizes or is directly buried in the ground. Elon Musk also has high hopes for this technology, giving 100 million US dollars to compete in this technology.
- Liquid solar fuel synthesis: Hydrogen and carbon dioxide from renewable energy generation capture the carbon dioxide produced and utilized by catalytic reactions to make methanol. This technology has broad prospects, but it is currently facing a technical bottleneck with high cost and low energy conversion efficiency.
- New carbon dioxide capture technology: For sewage treatment plants, carbon dioxide capture and emission reduction technology. The technology is still in the conceptual stage.
What are the Challenges of Geosequestration of Carbon Dioxide?
At the end of the geological storage of carbon dioxide, there are currently three major technical bottlenecks, the storage capacity is insufficient, the transportation and storage facilities are seriously corroded, and the injected carbon dioxide cannot produce economic benefits. So far, the current new technology is also making breakthroughs in the research and development of these existing problems, corresponding to capacity increase technology, anti-corrosion technology and secondary utilization technology. Through these, large-scale and effective geological storage of carbon dioxide is achieved, while minimizing the risk of large-scale storage of carbon dioxide underground.
Carbon Neutrality Policies and Industrial Impacts in Major Countries
United States: Current CCUS projects in the United States can receive government and local financial support through the federal government’s 45Q Tax credit and the California Low Carbon Fuel Standard. Among them, 4 5Q is a progressive subsidy method, according to the trend, to2026, the subsidy for carbon dioxide sequestration per ton of salt water can hit 50 US dollars.
UK: The UK is currently at the forefront of europe’s Carbon Neutrality. Through the implementation of the most low-carbon price policy, that is, through price regulation to strongly control the carbon emissions of power enterprises, to make up for the adverse impact of low-carbon prices on renewable energy utilization in the carbon market。 At the same time, through the implementation of emission performance standards. For both existing and newly built power plants, it is necessary to limit the carbon emission level per unit of power generation, and make policy preparations for the introduction of carbon capture and storage technology.
Europe: The EU mainly reduces carbon dioxide emissions through the carbon trading market. In addition, there are many public funds within the EU.
China: In the past decade, the biggest driving force for CARBON dioxide emission reduction in China has come from policy subsidies for wind and photovoltaic power generation, but with the gradual cancellation of subsidy policies, it remains to be seen whether China’s wind and photovoltaic power generation can maintain its previous development trend. For CCUS technology, the state has also introduced some laws and regulations to support the advancement, but it is not expected that there will be a policy of financial subsidies. It is also worth mentioning that China launched a national carbon emission trading market in 2021, and the power generation industry has also become an industry included in the national carbon market on the first page, with more than 2,000 key emitters included, making China’s carbon market the largest market in the world covering greenhouse gas emissions.
The Role of Carbon Neutrality in the ESG system
In the Environmental session of the ESG (Note 1), the importance of Carbon Neutrality is also becoming more and more significant. In the United States, Carbon Neutrality plays a pivotal role in the ESG system, with incentives such as 45Q and consumer environmental enthusiasm driving investment. In China, the role of Carbon Neutrality in the ESG system is still relatively limited, and objectively speaking, the investment enthusiasm of Chinese private enterprises is still relatively weak.
Summary
Most countries have set targets for achieving Carbon Neutrality by 2050-2060, and achieving Carbon Neutrality requires multi-pathway and multi-technology programmes “going hand in hand”. The three most representative key technologies for Carbon Neutrality: efficient use of renewable energy and large-scale renewable energy storage technology, green development and low-carbon utilization technology of fossil energy, and carbon negative emission key technologies such as carbon capture, utilization and storage (CCUS).
At present, various countries have adopted strong support policies for the development of renewable energy, such as the 45Q tax credit in the United States, the United Kingdom’s carbon emission performance standards and other key technologies for carbon negative emissions, and other countries should consider introducing similar policies. As for the role of Carbon Neutrality in the ESG system, Carbon Neutrality in the United States has played a pivotal role in the ESG system. In China, the role of Carbon Neutrality in the ESG system needs to be further strengthened.
Roundtable Discussion
Host:
Aside from Professor Zhang’ sharing just now, is there anything else Ronnie needs to add?
Dr. Fang:
I’ll add some more ideas about how Carbon Neutrality relates to ESGs. First of all, as Professor Zhang just said, in addition to the huge impact on E (environment), it has both S (social) and G (corporate governance) impacts Evaluation and measurement are actually relatively vague, or there is no universally recognized evaluation standard. But I think beneath the surface, Carbon Neutrality is not only suitable for E in E SG, but also for S and G. For example, in the process of reducing carbon emissions by improving the industrial chain, enterprises will also indirectly promote the cultivation of talents and provide more employment opportunities; At the same time, it will also produce new KPIs or new management policies by improving or adjusting the company’s management. These are actually closely related to ESG, so I think Carbon Neutrality is actually inextricably linked to all areas of ESG existence.
Host:
Toronto had a small tornado the other day, and it also caused a lot of losses in the follow-up. Many countries have said that they will complete the governance of the environment and climate in a few decades, so from Professor Zhang’s point of view, how long can we see the effects of some environmental changes?
Professor Zhang:
The Carbon Neutrality target for most countries is now set by 2050, which means that the average temperature increase by 2050 needs to be controlled within 1.5 degrees. For this goal, I think the challenge is very big. Even now that everyone has been 200% motivated to invest in this specific project of Carbon Neutrality, and the deployment of related technologies, I think that the actual effect on climate change will be very limited, and people will not have any perception. I thought that maybe by 2050, that is, the node that everyone has set, I think I will see obvious results. So I think in the next few years or even more than a decade, this extreme climate of the world, including this heavy rain, blizzard, extreme heat, should still continue to occur, in a short period of time should not have an immediate effect.
Host:
From the perspective of enterprises or startups, from what dimensions can investors be more favorable to themselves in terms of E SG, or more attractive?
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Last Words
We hope that this lecture can bring you harvests, from the past and present lives of Carbon Neutrality, related technologies and maturity, policy trends of various countries and other hot topics, to understand the development path and future expectations of Carbon Neutrality. We also hope that you will continue to pay attention to our AAIA (Asian American Innovation Alliance) events! If you have further ideas or questions that need to be discussed, please contact our AAIA Event Planning Department at info@aaiatech.org.