Assessing the Economics of CO2 Capture in China’s Iron/Steel Sector: A Case Study

Abstract

Global crude steel production reached 1.6 billion tonnes in 2015, registering an increase of 41% from 2005 levels, half of which is produced by China alone. Amongst other low-carbon technologies, Carbon Capture and Storage (CCS) is identified as a key technology that will help achieve the much-needed emission reductions in the iron/steel sector. This paper delineates a techno-economic analysis of a hypothetical first-of-its-kind CO₂ capture and storage project with a 0.5-million tonne of CO₂ per annum capture capacity, using amine capture technology, in a generic Chinese steel plant. The technical configuration of the project was modelled using the Advanced System for Process Engineering (ASPEN) accompanied by a financial model analysis. The cost of CO₂ avoidance for the modelled project with transport and storage was estimated at CNY448/tCO₂ (USD65.2/tCO₂). The cost of CO₂ avoidance is sensitive to a number of assumptions, including the discount rate and the cost of CO₂ transportation and storage. There is also potential for cost reductions in transport and storage if the project were to share infrastructure with large stationary emission sources.