With the rapid development of China’s economy, the contradiction between the growing demand for fossil energy consumption and the increasingly urgent pressure of emission reduction has become increasingly prominent. As a potential option to address climate change, CO2 enhanced coalbed methane recovery (CO2-ECBM) technology has been widely concerned, which can inject the CO2 captured into the coalbed to enhance coalbed methane recovery and store CO2 at the same time. Therefore, CO2-ECBM technology is of great significance for China’s low-carbon development, especially after China put forward the goal of achieving carbon neutrality by 2060. In order to provide references for CO2-ECBM technology deployment, the investment benefits of the CO2-ECBM project in China under various scenarios was evaluated based on real options in this study, and the key factors influencing the economy of the CO2-ECBM technology were also identified. The results showed that (1) without carbon trading, the investment benefits of CO2-ECBM project is 2.58 billion CNY in low CO2 source purchase price scenario(180 CNY/t); (2) if CO2 source purchase price rises to 300 CNY/t (high CO2 source price scenario), the CO2-ECBM project has no investment value as its revenues cannot offset the total costs; (3) the net present value (NPV) of CO2-ECBM project will decrease by 22.76 million CNY if the CO2 source purchase price increases 1 CNY/t, and the critical CO2 source purchase price is 293 CNY/t without carbon trading; (4) Carbon trading can greatly increase the investment income of CO2-ECBM projects, and in the low CO2 source purchase price scenario, the investment benefits of CO2-ECBM projects would increase by 44.2% with the current carbon trading price (50 CNY/t). However, China has not yet incorporated CO2 utilization technology into the emission trading system. The results of this study could provide theoretical support for CO2-ECBM investment and the relevant policy-making.
Keywords CO2-ECBM; real option; investment evaluation; CO2 emission reduction; CO2 utilization