Investment benefit analysis of coal-to-hydrogen coupled CCS technology in China based on real option approach

As a zero-carbon energy source, hydrogen energy can achieve deep decarbonization in the transport, steel, and cement industries. With the resource conditions and industrial infrastructure in China considered, the hydrogen supply method referred to as coal-to-hydrogen coupled with carbon capture and storage (CTHCCS) is a necessary choice in the early stage of low-carbon hydrogen energy development. This study analyzes the investment benefits of the representative CTHCCS at the national and regional levels in the current and future development scenarios in China by considering uncertainties such as carbon price, technological progress and policy incentive. The results show that (1) Tt (1) The opportunity for immediate investment in the CTHCCS is not available in China unless the cost of CCS technology and the carbon price reach the promotion stage of the future scenario or the development stage of the future enhancement scenario. (2) The current CTHCCS investment critical carbon price is 353.3 RMB/t, which will decrease by 45.0 %, 73.9 % and 57.3 % when using the initial investment subsidy, carbon emission reduction subsidy and clean fuel subsidy respectively. (3) The CTHCCS presents a relatively high investment efficiency in Xinjiang, Inner Mongolia, and Shaanxi, which comprise a pioneering region for "blue hydrogen" production in China.