The four parties intend to conduct a joint study to assess the technical solutions and develop a commercial model for the project. The study will also explore to establish high-integrity and verified low-carbon product supply chains and propose enabling policies. If successful, it will be China’s first large-scale open-source CCUS project with a potential capacity of tens of million tonnes of CO₂ per year.

“Carbon capture and storage (CCS) offers a way to reduce emissions in hard-to-abate sectors and we are actively exploring such opportunities with our partners,” Huibert Vigeveno, Shell’s Downstream Director, said. “This project is also in line with Shell’s strategic approach to provide decarbonisation solutions to individual market sectors, as well as our ambition of having access to at least 25 million tonnes a year of CCS capacity by 2035.”

If successful, this project could lead to the capture of CO₂ emissions from industrial companies in the East China region. These emissions could then be shipped to a receiving terminal on CO₂ carrier ships, before being transported to onshore and offshore storage sites through short pipelines. This could offer a flexible, efficient, and integrated decarbonisation solution for companies in the region.

Notes to editors:

According to Shell Scenarios Sketch “Achieving a carbon-neutral energy system in China by 2060”, which lays out a possible pathway:

• China has significant geological potential for storing carbon, with an estimated 2,400 gigatonnes (Gt) in storage capacity, second only to the USA. It currently has more than 40 CCUS pilot projects with a total capacity of 3 million tons. Many of these projects are small developments linked with enhanced oil recovery. This will need to scale up significantly over the next four decades.
• In a net-zero emissions energy system, a little more than 1.3 Gt of CO₂ a year will need to be captured and permanently stored in 2060. This means CCUS capacity will need to increase more than 400 times in the next four decades. While this is technically possible, 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.

(Link to the report: Achieving a carbon-neutral energy system in china by 2060 | Shell China)

About Shell in China:

All of Shell's core businesses have grown considerably in China. Shell works with PetroChina and CNOOC to develop onshore and offshore oil and gas resources in China and overseas. This includes the Changbei onshore gas project, developed in collaboration with PetroChina. Shell is also one of the leading suppliers of LNG in China.

Shell operates a retail network of almost 1,900 gas stations in China through joint ventures and wholly owned enterprises, with more than 3,000 charging points for electric vehicles. Shell has five lubricant blending plants and one grease production plant in China. It also operates a world-class petrochemical plant in the Daya Bay area of Huizhou City, Guangdong Province, in a joint venture with CNOOC.

Shell Energy (China) Co., Ltd. is an important part of Shell's global trading network, providing Chinese clients with a competitive and diversified LNG portfolio, power trading and carbon asset management and trading solutions. Shell Ventures has a dedicated team in China to accelerate innovation in the energy and mobility sector by investing in disruptive technologies and business models outside the company.

Enquiries:

Media China: SCHINA-Spokesperson@shell.com

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Shell Scenarios Sketch “Achieving a carbon-neutral energy system in China by 2060” 

Shell Scenarios Sketch “Achieving a carbon-neutral energy system in China by 2060” starts with data from Shell’s Sky scenario. In developing this scenario, we have assumed that China’s energy system reaches net-zero CO₂ by 2060, consistent with President Xi Jinping’s statement to the United Nations General Assembly in September 2020. We then worked backwards to see how this could occur. Of course, there are many possible paths for China to travel to a net-zero CO₂ energy system, but this is what we believe to be a technically possible path while maintaining a growing Chinese economy. While this scenario is more aggressive in its goal and assumptions than our Sky scenario, we believe, while extremely challenging it is still today technically possible. However, we believe the window for success is quickly closing and without significant action it may take longer for China to achieve a net-zero CO₂ energy system. Shell scenarios, including this scenario, should not be confused with Shell strategy or business plan. When developing Shell’s strategy, our scenarios are only one variable among many that we consider. Ultimately, whether society meets its goals to decarbonise, is not within Shell’s control. While we intend to travel this journey in step with society, only governments can create the framework for success.

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