The UK's Secretary of State for Energy and Climate Change Edward Davey today announced ￡35 million funding to support Carbon Capture and Storage (CCS) development in Asia with a focus on China and Indonesia.

The Secretary of State said in his speech at the Fudan Tyndall Centre in Shanghai that, 'I am delighted to be able to formally announce ￡35 million of International Climate Fund support for Carbon Capture and Storage development in China and Indonesia. CCS is a critical 'transformative' technology to combat climate change. Through this support, we hope to help China in its efforts to move more quickly towards a low carbon future, and to accelerate the deployment of CCS worldwide. This is another major step forwards in the UK-China partnership on climate change'.

The announcement came as the United Nations Intergovernmental Panel on Climate Change was due to release its landmark fifth assessment report on Friday. The report is expected to provide the world with more scientific consensus than ever before that urgent action must be taken to tackle the real and immediate threat of climate change.

CCS is a key part of the global efforts to reduce carbon dioxide emissions from coal and gas power plants, as well as large industrial sources such as steel or cement factories. China uses coal for more than 3/4th of its total electricity generation, creating huge potentials for future CCS development.

The International Energy Agency assessments have shown that to keep global temperature rise below 2°C - the internationally agreed target- it is estimated that CCS will need to contribute to at least 14% of emissions reductions by 2050. The IEA also predicted that the next seven years are critical in determining the uptake of CCS.

This funding is being used to support the Carbon Capture and Storage Fund (CCSF) under the Clean Energy Financing Partnership Facility (CEFPF) administered by the Asian Development Bank (ADB). The ADB is working with the UK's Department of Energy & Climate Change, the Global CCS Institute and partners within the Chinese Government to identify opportunities to accelerate the development and deployment of CCS. The funding will also support the GreenGen project in Tianjin City of China, which will receive over $10m from the ADB CCSF. The project was launched in 2005 by China's five largest power companies, two largest coal companies and one investment group, aiming to complete a 400 MW power plant before 2020 with over 80% of the CO2 separated and stored. To increase our collaboration, and in partnership with the ADB, we will be setting up three CCS centres, two of which will be in China and one in Indonesia.

The UK Government has also been working with Chinese partners in Guangdong to create a CCS roadmap for the province. This joint work has identified storage capacity in deep geological formations offshore in South China Sea as well as a low-cost full-chain Carbon Capture, Use and Storage pilot. Further work is now ongoing to transfer technical experience from UK industries to Guangdong, including establishing a UK-Guangdong CCS Centre that would build research capability, policy capacity and manufacturing excellence in the province.

A number of leading British research institutes and universities- the UK CCS Research Centre, the University of Edinburgh, the Imperial College of London- have established active research collaboration with similarly eminent Universities and academies here in China. British companies are also active in this growing commercial field, including Howden Group and Shell.

In 2011, twenty three governments, including the Chinese and British governments, joined the Clean Energy Ministerial initiatives and vowed to allocate $200 million internationally to accelerate the deployment of CCS in the near term. The UK Government has committed a total of ￡60m to support the development of CCS technology in emerging markets, including in China, Indonesia and South Africa, to mitigate the impact of climate change.

Shanghai is the second stop of the Minister's week-long visit to China starting from 23rd September. In his visit to Chongqing, the Secretary of State focused on bilateral cooperation in green building and carbon trading. He will arrive in Beijing on Thursday for a series of high-level dialogues with China's top decision makers to consolidate the partnership between China and the UK on low carbon and energy.