June 3 (Bloomberg New Energy Finance) – Chinese coal company Shenhua (SHGCLZ CH) has started construction of the country’s first commercial carbon capture and storage plant in Ordos, Inner Mongolia, Xinhua News Agency reported.

The CNY 210m (USD 30.8m) project is expected to capture 100,000 tonnes of carbon dioxide each year, Xinhua said, citing Wang Heming, a senior manager in Shenhua’s Ordos division. The plant is expected to come online by the end of the year.

Wang said Shenhua is also conducting a feasibility study for a second liquidification facility that will be capable of handling 1m tons of carbon dioxide annually.

The commercial viability of the project is not yet clear, he said. The operating costs of the 100,000-tonne facility are estimated at around USD 50 per tonne, he added.

International standards for the carbon capture industry have not been set, and the Chinese government has yet to give companies in the industry favorable treatment, Wang added.