US, China to collaborate on large-scale CCUS projects, each to advance at least 5 by 2030

US and China each will advance at least 5 large-scale cooperative Carbon Capture, Utilization and Storage projects by 2030, including carbon capture from industrial and energy sources, according to Sunnylands Statement on Enhancing Cooperation to Address the Climate Crisis, jointly released by both governments Nov. 15.

Besides collaborations on CCUS, the statement shows a glimmer of hope that these two most influential and emission-intensive economies are back on track in the climate realm with their government-level communications and private-sector collaborations.

The US and China decided to operationalize the Working Group on Enhancing Climate Action in the 2020s to engage in dialogues and cooperation to accelerate concrete climate actions in the 2020s, the statement showed.

The working group will focus on energy transition, methane emission reductions, circular economy and resource efficiency, low-carbon and sustainable provinces/states and cities, and deforestation, among other agreed topics, the governments said, adding that these areas were identified in the previous Joint Statement, released in April 2021, and the Joint Declaration, released during the UN's COP26 climate change conference in 2021.

In August 2022, China announced suspending climate dialogues with the US on the back of the US House of Representatives Speaker Nancy Pelosi's visit to Taiwan. The suspension of climate dialogues resulted in a significant delay in terms of fulfilling the agendas under these joint statements.

The governments said the newly released statement is an outcome of the high-level government meetings held in the past few months, including the meeting between President Xi Jinping and President Joseph R. Biden in Bali, Indonesia, as well as the meetings between US Special Presidential Envoy for Climate John Kerry and his Chinese counterpart Xie Zhenhua in Beijing this July and Sunnylands, California, in early Nov.

By resuming concrete and pragmatic collaborations, the US and China jointly committed to support this year's COP28 to achieve a successful outcome, the statement showed.

Enhancing climate targets

Despite the statement not mentioning any adjustment to the countries' current Nationally Determined Contributions, new commitments have been made for their 2035 climate targets.

The US and China agreed that their 2035 NDCs will be economy-wide and include all greenhouse gases, the statement showed.

Particularly, both countries agreed to include methane emission reduction targets in their 2035 NDCs, according to the statement, building on their existing national methane action plans.

To facilitate methane emission mitigation strategies, the two countries agreed to immediately initiate a technical working group, cooperation on policy dialogue, technical solutions exchanges, and capacity building.

For the near term, both countries committed to advance their efforts to halt and reverse forest loss by 2030, the statement showed. This is likely to create a bullish sentiment in the nature-based carbon market, policy analysts said.

In the statement, it was further reiterated that commitments under the previous joint statements remain effective and require sustained implementations, noting the target in the G20 Leaders' Declaration in New Delhi, India, to triple renewable energy capacity globally by 2030 and accelerate the substitution for coal, oil and gas generation to achieve meaningful absolute power sector's emission reduction in this critical decade of the 2020s.

Indications for a successful COP

The statement showed the tension between these two giant economies has melted. With the start of constructive dialogues between them, a more harmonious COP this year is indicated.

The US and China intended to recommence bilateral dialogues on energy policies and strategies, carry out exchanges on mutually agreed topics, and facilitate track II activities, namely non-governmental and private sector ones, to enhance pragmatic cooperation, the statement showed.

The governments also called for a restart of the US-China Energy Efficiency Forum to deepen policy exchanges on energy-saving and carbon-reducing solutions in key areas, including industry, buildings, transportation, and equipment.

The US and China, with the UAE, will invite countries to a Methane and Non-CO2 Greenhouse Gases Summit at COP 28.

For the first Global Stock Take, or GST, under the Paris Agreement, the US and China announced their common grounds in terms of the GST outcomes.

They agreed that the outcome should be balanced across thematic areas, including both retrospective and responsive elements, and consistent with the design of the Paris Agreement.

Previously, Chinese government officials and policy think tanks had voiced concerns on different occasions over whether GST outcomes will consider the historical emissions of developed countries and address the difficulties faced by China and other developing economies.

The two governments also agreed that developed countries should fulfill the goal of providing the long-awaited $100 billion of climate finance in 2023, and at least double their provision of adaptation finance.

Both countries welcomed the recommendations of the Transitional Committee to establish funding arrangements to address loss and damage, including the establishment of a fund.