China Resources Power Haifeng CCUS demo Proj-1
Visualisation of the Haifeng CCUS demonstration project. Image courtesy of www.gdccus.org
Scotland is to create a long-term competitive advantage for its oil and gas supply chain by investing £100,000 in China's emerging Carbon Capture and Storage (CCS) sector.

The Scottish Government and its main economic development agency, Scottish Enterprise, are contributing £50,000 each towards the project. This will help Scottish businesses and research institutions, including those within the Scottish Carbon Capture & Storage (SCCS) partnership, to engage in this emerging Chinese market.

Supporting the UK-China (Guangdong) CCUS Centre, the funding will help to establish a CO₂ capture test site at the Haifeng coal-fuelled power plant, as well as a pre-front end engineering and design (FEED) study to build CO₂ capture, transport and storage technology at a newbuild 8GW coal-fired power station in the province of Guangdong.

Minister for Business, Energy and Tourism, Fergus Ewing, said:

China is one of the world's largest energy producing and consuming countries. As a proportion of the world's atmospheric emissions, it releases over a quarter of the total emissions of carbon dioxide - and this trend is rising. As a result, China is facing increased pressure to reduce its CO₂ emissions. Scotland's energy industry is a recognised leader and is proven to work in partnerships around the world. Forty years of oil and gas production has created a strong supply chain, a skilled workforce, a renowned academic sector and well-developed energy infrastructure. These skills can be readily transferred to the CCS industry. Scotland is at the forefront of CCS and CO₂ enhanced oil recovery research, and we are looking to strengthen Scotland's co-operation with China.

Scottish Enterprise's international sector head for oil and gas, David Rennie, added:

Providing early support to China on its CCS journey will help put Scotland firmly in the limelight for future opportunities. It will provide us with new connections in the Chinese energy industry, enabling us to demonstrate our world-renowned industry and academic expertise in the oil and gas sector.

Guangdong is an engineering and manufacturing powerhouse for China, but relies largely on coal-fuelled electricity. The proximity of offshore oil and gas fields is expected to provide abundant opportunities for the storage of CO₂ – as the North Sea does for Scotland. This offers opportunities for the service sector and oil and gas operators – especially those which have already gained expertise in the UK's CCS commercialisation competition or are engaged in current commercialisation projects.

A steering group involving Scottish Enterprise, the Scottish Government and academics from SCCS will ensure Scotland's financial contribution is spent in areas which will highlight the Scottish supply chain's expertise, whilst working in collaboration with the UK-China (Guangdong) CCUS Centre. China has already undertaken some 20 demonstrations and pilot projects of CCS technology, and is expected to include a strong commitment to practical CCS construction in its next five-year plan.

SCCS project manager, Philippa Parmiter, said:

China is a major and rapidly expanding market for CCS and we expect this strong growth to continue in the coming years. Our link with Guangdong enables us to build relationships and jointly develop CCS opportunities in a region with many similarities to Scotland."

Secretary General of UK-China (Guangdong) CCUS Centre, Xi Liang, from the University of Edinburgh, said:

The collaboration between Scotland and UK-China (Guangdong) CCUS Centre would be a great opportunity for cost reduction in CO₂ storage and for establishing a global CCUS supply chain. I appreciate the early support of two Scottish institutes to the Guangdong CCUS initiative in July 2013, SCCS based at University of Edinburgh and Howden Group based in Glasgow. We are very grateful to the Scottish Government and Scottish Enterprise for their financial contribution. The new funding is an exciting opportunity and will help to forge a concrete foundation for the CCUS demonstration programme in Guangdong.

China offers many opportunities to grow Scotland's oil and gas sector and last week 12 companies participated in the Scottish pavilion at China (Beijing) International Offshore Oil & Gas Technology Conference (CIOTC). Supported by Scottish Enterprise through its international arm, Scottish Development International (SDI), the mission aimed to enhance the companies' abilities to partner with organisations in China, not only by meeting other companies during the conference but also through engagement with members of the international GlobalScot network.

CCS companies seeking engagement with Guangdong are welcome to contact Philippa Parmiter by emailing philippa.parmiter@sccs.org.uk

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