Can fossil energy make a soft landing？— the carbon-neutral pathway in China accompanying CCS

Abstract

Carbon capture and storage (CCS) is an essential technology in the portfolio of emission mitigation solutions. The trade-off between fossil energy substitution and CCS has essential implications for achieving carbon-neutral at an affordable cost. This study couples the technology cost curve of CCS with a dynamic computable general equilibrium (DCGE) model and explores the carbon emission scale, energy structure, and emission abatement cost in the path of carbon neutrality under different CCS penetration scenarios. The results illustrate that the emission abatement cost increases fast if only relying on the emission trading scheme (ETS). Even at a high carbon price (3500 CNY/Ton), the net carbon dioxide emission will remain at 1.5 Gt in 2060, and the average emission abatement cost is 1211 CNY/Ton. The realization of net-zero emission requires synergy between ETS and CCS. The integration of CCS can significantly alleviate the economic cost when the emission mitigation scale is more remarkable than 5.2 Gt/year. The average emission abatement cost in 2060 is 557CNY/Ton under the high CCS penetration (4.3 Gt/year) and low carbon price (700CNY/Ton) carbon-neutral scenario.