Energy Policy, Vol.121, 519-533, 2018
Business model design for the carbon capture utilization and storage (CCUS) project in China
The high cost of carbon capture has hindered the deployment of carbon capture utilization and storage (CCUS) technology. Due to a dearth of associated engineering practices and business activities, there are currently no broadly viable business models for the large-scale deployment of CCUS technology. Evaluations at the business model level are essential to consider external factors, particularly for projects with a long industry chain and complex relationships among stakeholders, such as CCUS projects. This paper fills a gap in CCUS research by introducing four business models based on the different stakeholders involved in CCUS projects and their varying degrees of integration. Using Monte Carlo simulation, the distributions of return for each stakeholder under the four business models were obtained. The results show that the vertical integration model is the most appropriate choice for CCUS deployment in China during the early demonstration stages due to its lower interest rates and transaction costs. Based on the current cost level of CCUS, subsidy for storage is recommended in the early stage, and reasonable and stable carbon pricing policies (e.g., carbon tax) are conductive to large-scale deployment of CCUS in the long term.