The U.S. and China on Tuesday finalized a memorandum of understanding that will allow them to jointly advance carbon capture, utilization, and storage (CCUS) and other clean coal technologies for commercial use. 

The agreement between the Department of Energy (DOE) and China’s National Energy Administration (NEA) was set up on Aug. 26 during the U.S.–China Clean Coal Industry Forum in Billings, Mont., but it won’t be signed until September. It essentially formalizes efforts by the two countries to continue collaboration on fossil energy technologies.

It will include work on six CCUS pilot projects in China, research and development under the U.S.-China Clean Energy Research Center, and the 2000-signed joint Fossil Energy Protocol.

The collaboration’s significance is underscored by the November 2014–agreement by the two countries to set up carbon emission targets. President Barack Obama set a new target to cut U.S. carbon emissions between 26% and 28% below 2005 levels by 2025. Chinese leader Xi Jinping, meanwhile, said his country is committing to peak its carbon dioxide emissions around 2030, and that it would also boost its share of non-fossil fuel energy to around 20% by 2030.

As the U.S. coal industry reels from new regulations—including the newly finalized Clean Power Plan—China’s recent measures to swiftly tamp down rampant air pollution have arguably been stricter (for more, see POWER‘s in-depth feature, “China’s War on Pollution“).

While it depends on coal power for 66% of its total consumption, China’s newest key energy strategy caps coal consumption. China has also embarked on shuttering inefficient coal plants en masse: According to the National Bureau of Statistics, the country scrapped as much as 3.3 GW in 2014, and it plans to close a further 20 GW of capacity that doesn’t meet new environmental standards by 2020. It is building many more advanced new plants however: In the first half of 2015, for example, 23.4 GW of 43.4 GW of new capacity added was thermal.

More recently, the NEA issued an action plan spanning 2015 to 2020 to increase clean coal technology use in its coal power fleet. Measures include improving coal washing and processing, developing ultra-low-emission coal power generation, and increasing efficiency. It will entail building large-scale, modern facilities to prepare coal so that by 2020, 80% of raw coal is washed. By 2020, meanwhile, the plan envisions that China will have 11 large coal storage and blending bases and 30 coal logistics parks each with annual circulation at 20 million tonnes or above.

To slash emissions, the plan calls for continued efforts to retrofit coal power plants. It also stipulates that coal consumption by newly built coal-fired generating units should be less than 0.3 kg standard coal per kWh, and existing ones should consume less than 0.31 kg/kWh. Coal-fired industrial boilers must run at an efficiency of five percentage points higher than 2013 by 2020.

NEA reportedly projects that, as environmental requirements continue to increase, China’s coal industry will face “many difficulties.”

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)