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Chinese stakeholders (131) from 68 key institutions in 27 provinces were consulted in spring 2009 in an online survey of their perceptions of the barriers and opportunities in financing large-scale carbon dioxide capture and storage (CCS) demonstration projects in China. The online survey was supplemented by 31 follow-up face-to-face interviews. The National Development and Reform Commission (NDRC) was widely perceived as the most important institution in authorizing the first commercial-scale CCS demonstration project and authorization was viewed as more similar to that for a power project than a chemicals project. There were disagreements, however, on the appropriate size for a demonstration plant, the type of capture, and the type of storage. Most stakeholders believed that the international image of the Chinese Government could benefit from demonstrating commercial CCS and that such a project could also create advantages for Chinese companies investing in CCS technologies. In more detailed interviews with 16 financial officials, we found striking disagreements over the perceived risks of demonstrating CCS. The rate of return seen as appropriate for financing demonstration projects was split between stakeholders from development banks (who supported a rate of 5-8%) and those from commercial banks (12-20%). The divergence on rate alone could result in as much as a 40% difference in the cost of CO(2) abatement and 56% higher levelized cost of electricity based on a hypothetical case study of a typical 600-MW new build ultrasupercritical pulverized coal-fired (USCPC) power plant. To finance the extra operational costs, there were sharp divisions over which institutions should bear the brunt of financing although, overall, more than half of the support was expected to come from foreign and Chinese governments.

Abstract: The Pearl River Mouth Basin (PRMB) is the largest petroliferous sedimentary basin in the northern South China Sea. It is near the coastal economic zone of Guangdong province where a large number of CO2 emission sources are located. Carbon dioxide enhanced oil recovery (EOR) represents an opportunity to promote offshore carbon capture, utilization and storage (CCUS) deployment because CO2 flooding offers a method to recover additional oil while simultaneously sequestering anthropogenic CO2. In this paper, a comprehensive multiparameter ‘quick look’ and potential evaluation method was proposed to screen and assess offshore CO2 EOR potential. A screening scheme for the CO2 EOR potential of reservoirs of the PRMB was also proposed using additional parameters, including reservoir properties and engineering design incorporating a dimensionless screen model and calculations. The results show that the suitability of reservoirs for CO2 EOR and storage varies and could be categorized into four priority grades. Approximately 30 of the oil reservoirs from 10 oilfields were preferentially identified by applying the screening method for reservoirs with predicted higher ultimate recovery potentials. It was predicted that 3227 × 104 t of additional oil could be produced from these reservoirs and that 3617 × 104 t of CO2 could be simultaneously stored. The sensitivity analysis shows that injection pressure (Pinj) would be more sensitive than production pressure (Pp) and well distance (L) on the CO2 EOR and storage efficiency, indicating that EOR operations with higher Pinj may improve oil production. The prospective reservoirs include those candidates with suitability grades of I and II from the Lufeng (LF) and Huizhou (HZ) oilfield clusters, where 1164 × 104 t of additional oil could be produced and 1464 × 104 t of CO2 stored with CO2 EOR. © 2018 Society of Chemical Industry and John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Strategic regional planning is an important step towards a successful CCUS development. This paper is the first effort of proposing a development plan of offshore CO 2 storage and transport for Guangdong in 2030 and 2050. We attempt to make an ambitious and achievable plan. The cluster-hub model of sources and sinks is adopted, and reuse of existing infrastructures is preferred. The targets of CCUS in Guangdong by 2050 are approximately 8% of the CCS targets that proposed for entire China (ADB, 2015), except a smaller target of 2050. The dual-phase and dual-track approach of ADB’s roadmap is followed. The CCUS phase I before 2030 is characterized by the capture of high-purity CO 2 from petrochemical industry and the storage of CO 2 mainly related to CO 2 -EOR. The target of ∼3 Mtpa CCUS in 2030 will be achieved by source-sink match A1. The phase II from 2030 to 2050 is characterized by a wider deployment of CCUS. The target of CCUS in Guangdong is ∼35 Mtpa in 2040 and ∼110 Mtpa in 2050, leading to the cumulative CO 2 avoidance of ∼187 MtCO 2 for 2031–2040 and ∼730 MtCO 2 for 2041–2050. Four source-sink matches are proposed for this phase, including the storage clusters in the Pearl River Mouth Basin and in the Beibuwan Basin in the northern South China Sea. Research with sufficient lead time to support the phased CCUS development is proposed, including databases, feasibility studies, technique R&D, cost estimation, and optimized system design. We are fully aware of the large uncertainty in the years ahead, and regard this planning as a highly general and hypothetic proposal. [ABSTRACT FROM AUTHOR]

Energy consumption and greenhouse gas emissions are increasing rapidly in Guangdong, an economically developed Chinese province. Carbon capture and storage (CCS) is an important approach to lower carbon concentration in this area. This study provides guidance and recommendations for CCS development and demonstration by analysing the necessity of CCS in Guangdong. Furthermore, this study identifies the major opportunities and technical demands related to CCS development in this province based on a sectoral analysis of emission inventory and the forecasting and identification of the potential CO2storage capacity. A CCS development roadmap is then developed for Guangdong based on the analysis results, and the milestone goals of this roadmap from the present until 2030 are presented in accordance with the development of technology in and the current status of Guangdong. In addition, the roadmap suggests CCS support policies. [ABSTRACT FROM PUBLISHER]

When the IPCC SRCCS report was released there was very little information in relation to public acceptance and communication. Ten years later, there has been a sizeable increase in the outputs from the social sciences with numerous papers, reports, and presentations, case reviews, toolkits, best practice guides, and other materials that have also been released in the public domain. This paper collectively examines many of the outputs from this research. It finds that much of the work can be loosely grouped into four main areas that include assessment and concerns of the general public, assessment and concerns of key stakeholders, assessment of the role of communication style and content, and assessment of experiences from real-life projects. Reflecting on the large body of work, it shows that there has been great progress in many areas of social science research, and the findings from this work possibly has greater, far reaching application than just for CCS projects. However, despite the positive progress the IPCC SRCCS identified two essential pre-conditions for CCS to be seen as credible. The pre-conditions were the recognition that: (1) anthropogenic global climate change is a serious problem and (2) there is a need for large reductions in carbon dioxide (CO 2 ) emissions. Unfortunately, this has not been the case. While public awareness of CCS has increased slightly from ten years ago, it remains low unless there has been some controversy about the technology in the local context. Given the lack of consistent, robust climate policy and the ensuing call for large amounts of GHG reductions, the larger public concern may be whether there will be the political will to address climate change at levels necessary to stabilize climate, that would make CCS a useful and more viable option. Despite this concern, as projects move to implementation stage the body of social science research that has focused on CCS provides a useful database of reference materials and ideas to help move projects forward. [ABSTRACT FROM AUTHOR]

Abstract: The cement manufacturing sector is the second largest source of anthropogenic greenhouse gas emissions in the world. Carbon Capture and Storage (CCS) is one of the most important technologies to decarbonise the cement manufacturing process. China has accounted for more than half of global cement production since 2008. This study suggests criteria to assess the potential to retrofit cement plants and analyses the economics of retrofitting cement plants for CCS with a case study of a modern dry process cement plant locating in Guangdong province, China. The study assumes the extra heat and power for CO2 capture and compression is provided by a new 200MW combined heat and power unit (CHP) (US$17.5/MWh thermal for the cost of coal). The estimated cost of CO2 avoidance by retrofitting a cement plant for carbon capture in 2012 is US$70/tonne at a 14% discount rate with 25years remaining lifetime. Through a stochastic cash flow analysis with a real option model and Monte Carlo simulation, the study found the value of an option to retrofit to be US$1.2million with a 7.3% probability of economic viability. The estimate is very sensitive to the assumptions in the carbon price model (i.e. base carbon price is US$12.00/tCO2e in 2012 and the mean growth rate is 8%). The option value and the probability can reach US$20 million and 67% respectively, if a 10% mean carbon price growth is assumed. Compared with post-combustion carbon capture retrofitting prospect in existing coal-fired power plants, the economics of retrofitting cement plants to carbon capture is less attractive. However, given the uncertainties in climate policy, regulation and carbon market, new-build cement plants in China, with long lifetime, should consider an essential level of “CCS Ready” to reduce the cost of retrofit and keep the retrofitting option open. [Copyright &y& Elsevier]

Abstract: A qualitative assessment of the early opportunities for capturing carbon dioxide from advanced gasification plants, and of design guidelines for carbon capture ready gasification plants in China, is conducted to investigate current development in coal gasification. The assessment first illustrates the development of different types of gasification technology in China. Capturing carbon dioxide from high concentration stationary emission points could be seen as an early opportunity for carbon capture demonstration. The large scale CTL plants and chemical plants installed with advanced entrained flow gasifier should be considered as early opportunity for CCS in China. However, given that the total amount of emissions and the scale of emission sources are relatively small at those plants compared with conventional coal fired plant, the potential emission reduction is very limited. [Copyright &y& Elsevier]

Abstract: China has been building approximately 1 GW of new coal-fired power plant per week since 2005. Power plants now in construction may continue to operate until 2040. “CCS (Carbon Capture and Storage) Ready” enables and eases the subsequent retrofitting of a plant to be able to capture carbon dioxide later in that plant’s lifetime. Building on the definitions of the IEA GHG (IEA Greenhouse Gas Programme) and GCCSI (Global Carbon Capture and Storage Institute), this study suggests a novel concept ‘CCS Ready Hub’ for implementing CCS Ready. A CCS Ready Hub not only includes a number of new coal-fired power plants but also integrates other existing stationary carbon dioxide emissions sources into the planning for potential infrastructure. We conducted a case study of Guangdong province in China with a detailed engineering and economic assessment in Shenzhen City. The study first reviewed the potential storage sites and analysed the existing stationary emissions sources in Guangdong using a GIS (Geographic Information System) approach. Thereafter, we focused on investigating the economic benefits of a ‘CCS Ready Hub’ at a potential 4 GW new USCPC (ultra-supercritical pulverised coal-fired) power plant in Shenzhen. Using the cost of carbon dioxide avoidance in 2020 as a criterion, we found that the concept of a CCS Ready Hub to finance CCS Ready at a regional planning level rather than at an individual plant is preferred since it significantly reduces the overall cost of building an integrated CCS system to reduce carbon emissions in the future. [Copyright &y& Elsevier]

Abstract: We present results of a major survey of Chinese opinion leaders conducted from March to April 2009, supported by EU–UK–China near zero emissions coal (NZEC) initiative. Respondents were drawn from 27 provinces and regions using an online survey with follow-up face-to-face interviews. A total of 131 experts and decision-makers from 68 key institutions were consulted through online survey. This survey is the first to focus on demonstration projects in particular and is the most geographically diverse. We aim to understand perceptions of applying CCS technologies in the first large-scale CCS demonstration project in China. Though enhanced oil recovery (EOR) and enhanced coal bed methane recovery (ECBM) may not be long-term solutions for CO2 storage, they were viewed as the most attractive storage technologies for the first CCS demonstration project. With regard to CO2 capture technology, on the whole, post-combustion (which would be most applicable to the vast majority of existing power plants which are pulverised-coal) received slightly higher support than pre-combustion. More surprising, respondents from both the power and oil industries favoured pre-combustion. There was no consensus regarding the appropriate scale for the first demonstration. A large number of respondents were concerned about the energy penalty associated with CCS and its impact on the long-term sustainability of coal supply in China, although such concerns were much reduced compared with surveys in 2006 and 2008. [Copyright &y& Elsevier]

Abstract: We evaluate the benefits of a ‘CCS Ready Hub’ approach, a regional ‘CCS Ready’ strategy, which not only includes a number of new coal-fired power plants but also integrates other existing stationary CO2 emissions sources, potential storage sites and potential transportation opportunities into an overarching simulation model. A dynamic top-down simulation model was built based on economic decision criteria and option pricing theory. The model inputs and assumptions build on spatial sampling and analysis using a geographic information system (GIS) approach, engineering assessment of local projects and outputs of a CCS retrofitting investment evaluation through cost cash flow modelling. A case study of Shenzhen city in the Pearl River Delta area in Guangdong in southern China is presented, based on engineering and cost assessment studies and stakeholder consultations and building on existing geological surveys and infrastructure plans. The simulation results show that financing ‘CCS Ready’ at regional planning level rather than only at the design stage of the individual plant (or project) is preferred since it reduces the overall cost of building integrated CCS systems. On the other hand, we found the value of considering existing stationary CO2 emissions sources in CCS ready design. Therefore, we recommended that making new plants CCS ready or planning a CCS ready hub should consider existing large emissions sources when possible. [Copyright &y& Elsevier]

Abstract: Although doubts about the technical and economic viability of retrofit to existing plants can be identified there have also been suggestions that CO2 capture retrofits at appropriate sites could be economically attractive. The potential to extend the life of existing plants with paid-off capital could be beneficial and some project developers are exploring retrofit opportunities for CO2 capture demonstration. This paper (and the accompanying study commissioned by IEAGHG) shows that there is a sound theoretical basis for CCS retrofits to existing power plants to be considered as a complement, and in some cases as an alternative, to new build power plants with CCS. A key recommendation resulting from the technical and economic analysis undertaken is that a general rejection of retrofitting on grounds such as the age or lower efficiency of existing plants is not justified. Instead CCS retrofits need to be assessed on a site-specific basis, which is feasible since only a relatively small number of plants (order 100’s) need to be retrofitted in order to have a significant impact on global CO2 emissions. Initial site-by-site retrofit potential studies using aerial photographs that have already been undertaken in several countries could be complemented by additional, more detailed, engineering studies and extended as ongoing national reference databases. [Copyright &y& Elsevier]

Abstract: A consensus for the development of a low carbon economy in China is growing rapidly among Chinese energy stakeholders. But there is considerable uncertainty as to the role that carbon capture and storage (CCS) retrofit could play in this development. The State Council in China has set a target of cutting carbon dioxide emissions per unit of GDP by 40% by 2020 compared with the level for 2005. Although this provides some policy impetus for reducing carbon dioxide emissions in China, it is also important to note that over 350 GW of coal-fired power plant capacity has been built within the past five years and that these power plants are expected to operate for at least another 25 years. Because coal is an affordable and accessible fuel in China, both the China Electricity Council (CEC) and the International Energy Agency (IEA) estimates that another 300 GW of supercritical and ultra-supercritical new coalfired power plants will be constructed in the next decade to satisfy the growing energy demand of the country . But unless other options to reduce emissions can be implemented, a simple consideration of the emissions they produce suggests that some of these recently built power plants may be required to shut down within the next two decades to address Chinese and/or international climate policies. During the past five years, the national policy of ‘closing smaller and/or inefficient units to build large and more efficient units’ has been implemented not only to save energy, but also to reduce specific carbon dioxide emissions (i.e. reduced gCO2/kWh of electricity produced). Forcing early plant closure has, however, proved to be a difficult task under the institutional framework of the Chinese electricity sector, because these plants usually had not reached the end of their design lifetimes. Also it was only partially successful in the context of CO2 reduction in the sense that companies wanted to build large plants to increase electrical output and strict rules meant they could only do this by closing a specified amount of older plant. But the end result was still that more coal was burnt and hence total CO2 emissions to atmosphere increased. Retrofitting some of the existing power plants to capture CO2, which by contrast can achieve an absolute decrease in CO2 emissions to atmosphere for an analogous loss in plant output (to the closures previously enforced) is therefore, an important option to address the threat of climate change while maintaining in the meantime the country’s electricity supply from coal. A preliminary investigation of over 100 large power plants in China was conducted to determine their potential for a retrofit with CO2 capture, transport and storage. Factors assessed included geographic location, space on site, plant layout, water restriction, coal supply, efficiency, FGD status and potential access to storage sites. Based on these criteria, retrofitting prospects were evaluated and rated. It appears that about 45% of existing power plants may suffer from ‘carbon lock-in’ status, i.e. their emissions could not be abated using CCS technology, at least at ‘reasonable’ cost. Critical factors that would preclude capture retrofit are, not surprisingly, access to storage sites and unsuitable plant layout and/or space on site. Variations in other factors would affect the level of retrofitting cost, but this effect could be positive as well as negative. In principle, plants would be retrofitted in an order that reflects the extent to which these site specific factors would give higher or lower retrofit costs. The results aim to provide an overview of the potential issues that need to be considered by stakeholders, policy makers and manufacturing companies when deciding the market potential for CCS retrofit technology in China. [Copyright &y& Elsevier]

Abstract: While CCS is demonstrated globally utilities will face a period with fast learning curves for capture technologies. Technology and cost uncertainty is a topic of particular concern for first-movers. For post-combustion capture plants, costs are expected to decrease in the future and improved solvents are likely to become commercially available after the first CCS plants have started operating. Given that power generation assets are usually paid back over extensive periods of time it is important that, in this context, the first generation of plants and any capture-ready plants can be future-proofed to incorporate future technological improvements. This paper presents selected results from a forthcoming report commissioned by the IEAGHG. A methodology based on a sensitivity analysis of solvent properties is used to identify pieces of equipment, which contribute to locking-in performance with capture. Finally, some principles for analysing power plant economics with improved solvents and assessing the potential financial benefits in competitive electricity market of mitigating these technology risks are examined. [Copyright &y& Elsevier]

A capture option is an option contract where the option holder can exercise a contract to retrofit an existing fossil fuel plant to capture carbon dioxide (CO2) on or before a fixed date. We suggest that new thermal power plants, particularly those in developing countries, consider issuing capture options at the design stage, because the sellers—the owners of newly built thermal power plants—may then invest in making these plants CO2 capture ready (CCR) to optimise returns from selling capture options. In a detailed case study on a 600 MW ultrasupercritical pulverised coal-fired power unit a potential storage site in Guangdong, China, the value of a capture option and CCR investment is evaluated using the backward deduction option pricing method through a stochastic cash flow model with Monte-Carlo simulations. If the power plant is retrofittable without CCR investment, then for an 8% discount rate the value of a capture option is US$11 million before CCR investment, Investing US$3.8 million in CCR increases the value of the capture option by an estimated US $12 million. Perhaps more important from a policy point of view, CCR investment can reduce the odds of early closure by 20% and also increase the chance of retrofitting to capture by 43%. If the power plant is not retrofittable in the absence of CCR design modifications, CCR investment to avoid 'carbon lock-in' is not only important for climate policy but is also economic from an investment point of view. We also conduct sensitivity analyses on a range of key assumptions to test the robustness of the findings. [ABSTRACT FROM AUTHOR]

Abstract: Making new plants CO2 capture ready (CCR) would enable them to retrofit to capture CO2 at a later date at lower cost when the appropriate policy and/or economic drivers are in place. In order to understand the economic value and investment characteristics of making new plants CCR in China, a typical 600MW pulverised coal-fired ultra-supercritical power plant, locating in Guangdong province, was examined. Combined with an engineering assessment, costs were estimated for different CCR scenarios. To analyze CCR investment opportunities, the paper applies a cash flow model for valuing capture options and CCR investment. Results were obtained by Monte-Carlo simulation, based on engineering surveys and an IEA GHG CCR study, as well as plant performance information and expert projections on carbon prices, coal prices and electricity prices. CCR investments are justified by factors such as higher retrofitting probabilities, lower early closure probabilities and fair economic return. However, the economic case for CCR largely depends on two factors: (a) whether the original plant is retrofittable without CCR; and (b) the type of investments made, for example, investments essential to CCR tend to be more economic than additional non-essential CCR features such as clutched low pressure turbines. The carbon price and discount rate were found to have significant impacts on the economics of CCR. Overall, it appears that the value of the ‘capture options’ that CCR generates for retrofitting CCS is significant, and so could justify a modest CCR investment, even assuming the original plant is retrofittable without CCR. It was also found the value of CCR might be significantly understated if the range of potential retrofitting dates is artificially constrained. [Copyright &y& Elsevier]

Abstract: In collaboration with several Chinese institutions, we interviewed over 100 stakeholders in mid -2008 to improve our understanding of the drivers and the barriers to deploying CCS in China. We investigated a range of stak eholders’ perceptions with regard to the socio -economic impacts, environmental concerns, energy security and international cooperation and investment. In addition to general questions applicable to all stakeholders, we asked tailored qu estions appropriate to specific sectors such as finance, electricity generation and national and local government for more detailed responses. We explored the factors that may create an enabling environment for CCS including international and domestic incentives, financing me chanisms, the legal and regulatory framework, technology and IPR, baseline determination, and social acceptance. The overall results are compared with similar studies conducted in China in 2006 and internationally. [Copyright &y& Elsevier]

Abstract: China has built at least 70 GW of new coal- fired power installed capacity annually since 2005 and the growth is expected to continue (CEC, 2008). Chinese government, industry and academic stakeholders perceive that China will not mandate new plants to be built with carbon dioxide capture and storage systems in the short term and there is little incentive even to contemplate the first steps needed to fit plants with capture equipment [Reiner, D., Liang, X., Sun, X., Zhu, Y., Li, D., 2007. Stakeholder attitudes towards carbon dioxide capture and storage technologies in China, International Climate Change Conference, Hong Kong, May 29–31 2007]. We investigate the value of making new plants CO2 Capture Ready (CCR), which would enable them to retrofit to capture CO2 without unnecessary additional costs when the appropriate policy and /or economic drivers are in place (IEA, 2007). In order to understand the value and investment characteristics of CCR in China, a typical 600 MW pulverized-coal -fired ultra-supercritical power plant, locating at Guangdong province, was examined. Combined with a detailed engineering assessment, we obtained the costs for different CCR scenarios. To analyze CCR investment opportunities, we apply a cash flow model for valuing Capture Options, as developed in [Liang, X., Reiner, D., Gibbins J., Li J., 2007. Fianncing CCR coal-fired power plants in China by issuing capture options, EPRG Working Paper Series, EPRG0728, Cambridge, December. Available at: www.electricitypolicy.org.uk/pubs/wp/eprg0728.pdf]. Results are obtained by Monte-Carlo simulation, based on engineering surveys and the IEA (2007) CCR study, as well as plant performance information and expert projections on carbon prices, coal prices and electricity prices. CCR investments are justified by factors such as higher retrofitting probabilities, lower early-closure probabilities and fair economic return. However, the economic case for CCR largely depends on the type of investments made, for example, CCR-essential investments tend to be more economic than additional non-essential CCR features such as CCR Essential with clutched low-pressure turbines. Carbon price, coal price and discount rate also were found to have significant impacts on the economics of CCR. Overall, it appears that the value of capture options are significant, and therefore clear retrofitting strategies would be valuable for any CCR investment. [Copyright &y& Elsevier]

In this paper, the immiscible water-alternating-CO2 flooding process at the LH11-1 oilfield, offshore Guangdong Province, was firstly evaluated using full-field reservoir simulation models. Based on a 3D geological model and oil production history, 16 scenarios of water-alternating-CO2 injection operations with different water alternating gas (WAG) ratios and slug sizes, as well as continuous CO2 injection (Con-CO2) and primary depletion production (No-CO2) scenarios, have been simulated spanning 20 years. The results represent a significant improvement in oil recovery by CO2 WAG over both Con-CO2 and No-CO2 scenarios. The WAG ratio and slug size of water affect the efficiency of oil recovery and CO2 injection. The optimum operations are those with WAG ratios lower than 1:2, which have the higher ultimate oil recovery factor of 24%. Although WAG reduced the CO2 injection volume, the CO2 storage efficiency is still high, more than 84% of the injected CO2 was sequestered in the reservoir. Results indicate that the immiscible water-alternating-CO2 processes can be optimized to improve significantly the performance of pressure maintenance and oil recovery in offshore reef heavy-oil reservoirs significantly. The simulation results suggest that the LH11-1 field is a good candidate site for immiscible CO2 enhanced oil recovery and storage for the Guangdong carbon capture, utilization and storage (GDCCUS) project. [ABSTRACT FROM AUTHOR]

China's steel sector, contributing 40% of world steel production, are moving the plants out of highly-populated areas in China. Carbon capture and storage (CCS) is an important technology to achieve a deep reduction of emissions in steel plants. Given by high cost and lack of policy incentive in deploying the CCS process, there has been a lack of progress in CCS within the steel sector in China. Capture readiness is a design concept to ease future CCS retrofit and avoid the carbon lock-in effect in steel plants. Capture Readiness design requires moderate upfront investment, i.e. less than 0.5% additional capital expenditure, but could easily enable the plant to be retrofitted with CCS technologies in their lifetime. The paper develops a novel linear programming model to assess the economic cost of Capture Readiness design in a generic steel plant in China. The Baowu Steel Zhanjiang project was used as a reference plant to develop the generic steel plant for the model. Through a Monte Carlo simulation, the results show that the economic cost of making new steel plants in capture readiness for 0.5 million tonnes capture is CNY 65 million (USD 9.5 million) in a conservative 5% carbon price growth rate scenario. The paper found the value of flexibility brought by capture readiness design is significant and is equal to approximately 15% of initial capital investment. The economically viable chance of retrofitting steel plants with CCS technologies in the lifetime is 49%. In an uncertainty analysis, for a 6% growth rate of carbon price, the option value could be increased to CNY 145 million while the probability of retrofit increases to 79%. China's CCS policy should consider a requirement for newly built steel plants to adopt capture readiness design to capture the significant economic value and ease emissions reduction in the iron and steel sector in the long term. • This is the first study investigating CCS readiness in the iron and steel sector. • Capture readiness steel plant can ease retrofit processes with carbon capture and storage in a plant's lifetime. • The paper proposes the key criteria for designing a CCS readiness steel plant. • A novel model is developed in assessing the value of capture readiness. • The retrofit option value of a steel plant is higher than the estimated additional cost for making CCS readiness. [ABSTRACT FROM AUTHOR]