Coal cleaning:

1
Coal cleaning

• A viable strategy for
• reduced carbon emissions
• and
• improved environment in China?

2

• Cooperation between National Bureau of Statistics
  of China and Statistics Norway 1998-2002
• Methods for environmental accounting
• Analytical tools, energy-environmental-economic
  analysis
• NORAD funded

3
3E-analysis

• General equilibrium model (CGE) with emphasis on
  energy use and emissions to air
• Coal cleaning measure to reduce CO2-emissions
  and local pollutants (WB, Govt)
• Mechanical coal washing

4
Pilot study of coal cleaning

• Two coal varieties in the CGE raw coal and
  washed coal
• Users may fairly easily switch
• Input of thermal energy per unit produced kept
  constant
• Incentives for switch cost per unit thermal
  energy

5
Coal washing

• Particulate matter washed out
• Less carbon and PM emissions per unit thermal
  energy

6
Saving transportation

• More heat value per tonne means lower
  transportation costs
• Coal transportation about 40 percent of
  transportation capacity.

7
CDM-project

• Capital allocated to coal cleaning as part of a
  CDM project
• Cleaned coal twice as costly as raw coal
• Coal cleaning unprofitable at project level
  acceptable as CDM project

8

• Increase in total energy use 2.5
• Increase in total coal use 10
• Higher economic growth 0.2
• Reduced particle emissions 2

9
At project level

• users switch to cleaned coal, hence more raw coal
  is available to other users at a lower price
• less transportation is needed, hence more
  T-services are available to other users at a
  lower price.

10
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11
CDM and the leakage problem

• Leakage an unanticipated CO2-emission in a CDM
  project
• The Kyoto process much less focus on leakage in
  Energy related projects than in Land use
  change-projects.

12
Böhringer et al. (2003)

• Simulate CDM project in India inproved energy
  efficiency incoal based electricity production
• CGE model including host (India) and purchasers
  of ER (Germany)
• Result 56 percent of credited carbon reductions
  are lost in indirect market effects.

13
Leakage effects

• Leakage in CDM energy projects are probably huge
• Leakage in all CDM projects should be considered
  more closely
• Tax schemes should follow the project approach

14
China and CDM?

• Interim measures for management of CDM June 2004
• Requires project developer to share the benefits
  from CER-transfers with the govt.
• Only projects with 50 pluss Chinese ownership