BHP Billiton is stepping up its efforts to bolster the use of technology to capture and store carbon emissions, by funding a joint research program with Peking University, which is aimed at slashing carbon emissions in the industrial sector.
The company is already working in the power sector in a joint venture with a regional power utility, SaskPower in Canada, which is targeting carbon storage in the power generation sector.
As the power generation sector ramps up its efforts to reduce carbon emissions globally with a shift towards renewables and also using more gas, rather than coal, this may see the industrial sector – steel in particular – come under increased scrutiny over its carbon emissions.
Steel production accounts for an estimated 7 per ent of global emissions and, unlike the power generation sector, which has the option of using alternative power sources, there is no known substitute to using coking coal when making steel.
“Debate that centres on making one fossil fuel appear more climate friendly than another misses the point,” BHP Billiton chief executive Andrew Mackenzie said in Beijing when announcing the tie-up.
“Fossil fuels [coal, gas and oil] will remain a part of the energy mix for the foreseeable future. Emissions activity from steel production will also continue to be substantial and in many cases there are no immediate alternatives for replacing key ingredients such as metallurgical coal.”
The joint program with Peking University is planned to both explore the technology and also what policy measures could be adopted to help stimulate the development and adoption of carbon capture and storage in the industrial sector.
China is introducing a carbon trading scheme from 2017 which may help to improve the economics of the technology, Mr Mackenzie said.
Working jointly with the university will help to “get the fundamentals right and accelerate CCS development and deployment”, Mr Mackenzie said.
In its joint venture with Canada’s SaskPower, sufficient progress has been made which could drive a 30 per cent reduction in the anticipated capital cost of building new CCS units, and help to improve the underlying economics of adopting the technology in the power generation sector.