Multi-agent simulation of policies driving CCS technology in the cement industry

Abstract

Carbon capture and storage (CCS) technology has the potential to accelerate the cement industry's transition to low carbon, but it is still in the early demonstration stage. Strong policies are needed to promote its large-scale development. However, previous research was inadequate to identify the intertwined motivating factors behind the policy, which led to the policies being less effective. Therefore, this paper aims to explore the impact of policy on the diffusion of CCS in the cement industry by delving into the interaction mechanisms among agents, including the government, cement companies with and without CCS, CCS technology, and downstream sectors of the cement industry. An agent-based model is developed to simulate the effects of various policy measures on multi-agents’ behaviors and to examine CO₂ emissions, costs, and CCS penetration rates. The results indicate that CCS diffusion will start in 2026, and a diffusion rate of 45.2% will be achieved by 2060, considering China's 30% investment subsidy ratio. The policy with the highest rate of CCS diffusion (62%) and the highest rate of emission reduction (87%) by 2060 provides for a 30% investment subsidy combined with a full quota charge. The 10% investment subsidy policy has the lowest unit cost of abatement (133 CNY/tCO₂).