Carbon capture and storage will not be deployed on a large-scale in China, a new report said.

China lacks incentives to develop and expand CCS technology at its coal-fired power plants beyond a handful of demonstration projects, according to the report by California-based Stanford University.

Large-scale deployment of CCS would put a strain on China’s energy supply, as CCS plants require 20-30 per cent more fuel than normal plants.

The report, called "The real drivers of carbon capture and storage in China and implications for climate policy," said China has a non-negotiable desire for cheap power, which fits poorly with the high costs associated with CCS.

Also, the Stanford report argued that carbon trading is unlikely to provide the funding necessary for large-scale CCS activity in China, a leading emitter of climate-changing gases.

Carbon markets not enough

The International Energy Agency has estimated that in order to achieve desired emission cuts from CCS in China by 2050, some $25-30 billion must be invested each year from 2030.

CCS technology could be included in a reformed clean development mechanism (CDM) and possibly also become eligible for international carbon credits under US climate legislation.

But even if this happens, and the carbon market focuses 25 per cent of its funds on CCS, that would only yield annual investments of $7.2 billion – a quarter of the yearly need, the Stanford report said.

Additional models for foreign funding of CCS in China would run into political problems, according to the report.

“Purely apart from the financial capacity of the developed world to support CCS in China, there is the question of the political viability of a programme which could be seen by OECD voters as steering technology and jobs on a massive scale to an economic competitor,” it said.

The authors said climate negotiators should instead focus on solutions that could improve the efficiency of the Chinese power sector in general.

If China reaches the same efficiency level as Europe, it could cut 20 per cent of the sector’s carbon emissions, according to the report.