Carbon capture and storage (CCS) from coal combustion is widely viewed as an important approach for China’s carbon dioxide (CO₂) emission mitigation, but the pace of its development is still fairly slow. In addition to the technological and economic uncertainties of CCS, lack of strong policy incentive is another main reason for the wide gap between early expectations and the actual progress towards its demonstration and commercialization. China’s mitigation scenario and targets are crucial to long-term development of CCS. In this research, impacts of CCS on energy and CO₂ emissions are evaluated under two mitigation scenarios reflecting different policy effort levels for China using the China-in-Global Energy Model (C-GEM). Results indicate that with CCS applications in the power sector China can achieve an added emissions reduction of 0.3 to 0.6 Gigatons CO₂ (GtCO₂) in 2050 at the same level of carbon taxes respectively in the two mitigation scenarios. Under the more ambitious mitigation scenario, approximately 56% of China’s fossil fuel fired power plants will have CCS installed, and CO₂ emission amounting to 1.4 GtCO₂ will be captured in 2050. A carbon price not lower than $35/tCO₂ appears to be necessary for the large-scale application of CCS in the power sector, indicating the vital role of policy in the deployment of CCS in China’s power sector.