China National Petroleum Corporation has started construction of the nation's first carbon capture and storage project.

The project, which is on the site of Shenhua Group's coal-to-liquid project in Ordos, Inner Mongolia, involves an investment of CNY210 million and will be operational by the end of 2010.

It will be able to capture and store 100,000 metric tons of carbon dioxide per year. Annual capacity will later be increased to one million tons and three million tons in two phases.

In November 2009, the Chinese government announced that it aims to reduce the ratio of carbon dioxide emissions per unit of GDP in 2020 by 40% to 45% of the level in 2005.