Carbon Management of a Coal-to-Liquid Plant and Its Implication for China

In a carbon-constrained world, carbon management options for climate change mitigation are becoming increasingly important, especially in China, one of the biggest energy consuming and GHG emitting nations in the world. As a case study of a carbon capture and storage (CCS) option for a specific coal-to-liquid (CTL) plant, this paper develops a profit-maximizing non-linear programming model of CO2 point sources and associated geological storage reservoirs. The simulation is based on technical-economic modeling for a chain of CCS processes including compression, transportation and storage derived from previous research. The process of capture is not included considering the CTL plant will produce sufficient pure CO2 emissions to store without significant capture cost. The modeling results identify site-specific opportunities for economic feasibility decisions related to the deployment of CCS technologies and provide the information to derive the CO2 sequestration supply curve for the firm. Accordingly, the implications for the firm’s and China’s carbon management are discussed. It is worth noting that though this economic analysis is based on a particular CTL project, the modeling approach can be applied to a broad array of sequestration opportunities