Bids are now being accepted for the UK’s first ever carbon storage licensing round, with 13 areas up for grabs.
Industry regulator the North Sea Transition Authority (NSTA) has officially launched the process, which could pave the way for decarbonising large swathes of the UK economy.
Alongside the six storage licenses that have already been dished out, the new areas have the potential to make a significant dent in the target to lock away between 20 to 30 million tonnes of CO2 by 2030.
Carbon capture and storage (CCS) involves bagging emissions from industrial processes and safely depositing them offshore, deep underground in geological formations.
It is expected to play a “crucial role” in decarbonising major clusters, including Teesside, Humber and Grangemouth.
The 13 areas being offered for licensing are off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire in the southern North Sea, central North Sea, northern North Sea, and East Irish Sea.
They are made up of a mixture of saline aquifers and depleted oil and gas field storage opportunities.
While this round is the first, it is unlikely to be the last, with estimates that as many as many as 100 CO2 stores could be needed in order to meet the net zero by 2050 target.
Energy and climate change minister Greg Hands said: “We’re determined to make the UK a world leader in carbon capture, which will be crucial in helping us reduce emissions and protect the viability and competitiveness of British industry.
“This licensing round is an important step in making this a reality, helping support new jobs across the UK and encouraging investment in our industrial heartlands.”
In its recent report, the Intergovernmental Panel on Climate Change (IPCC) underlined the need for CCS in order to zero out emissions from industry sectors.
‘High-quality bids’ a must
The NSTA has launched the licensing round in response to “unprecedented levels of interest” from companies eager to enter the market.
And the level of interest already expressed means the regulator is expecting “strong competition”, meaning entrants will have to produce “high-quality bids” to win licences.
In choosing suitable areas to make available for licensing, the NSTA considered a range of issues, including co-location with offshore wind, with overlap between the two already emerging as a problem.
The application window is open for 90 days, closing on 13 September, and will be evaluated by the NSTA on technical and financial criteria.
It is expected that any new licences will be awarded early next year.
Up and running by the end of the decade
Different licenses are expected to proceed at different paces, due to their size and scale, but first injection of CO2 could come as early as four to six years after they have been allocated.
In addition to being awarded a licence from the NSTA, successful applicants will also need to obtain a lease from the Crown Estate or Crown Estate Scotland, depending on location, before they can progress a project.
Andy Samuel, NSTA chief executive, said: “This is an important day on the path to net zero emissions. In addition to the huge environmental benefits of significantly reducing carbon dioxide emissions into the atmosphere, the facilities will provide opportunities for many thousands of highly-skilled jobs.
“Carbon storage is going to be needed across the world. There is growing investor appetite and we are keen to accelerate development of the carbon storage sector so that UK is well-positioned to be a global leader.
“The NSTA is ready to work with industry, government, regulators and others to deliver these exciting projects at pace.”
Will Webster, energy policy manager at Offshore Energies UK (OEUK), said carbon capture technologies will be a key element in helping the UK reach net zero.
“It is particularly important for industry, especially heavy industries which need a lot of energy and so produce a lot of CO2. This applies particularly to the cement and steel industries, petrochemical refineries, and power generation.
“The UK’s oil and gas sector has a highly skilled workforce used to managing and transporting large volumes of gas safely and they will have all the knowledge needed to make this technology work.
“This is a long-term project – we want to be able to store 50 million tonnes of CO2 a year by 2035 and continue expanding after that. That means we need a long-term commitment from government, a clear regulatory framework, and business models that encourage early investment.”
Keith Wise, operations manager at OEUK, said: “Deploying CCUS will need the same range of skills and experience as the offshore oil and gas industry already possesses. That includes offshore engineering, geological and seismological sciences and many more. We look forward to seeing this emission reduction technology develop as a key part of the UK’s transition to net zero.”
Professor John Underhill, the University of Aberdeen’s Interdisciplinary Director for Energy Transition, said: “I welcome today’s launch of the first offshore carbon storage licensing round, which builds on the back of recent bespoke permits and Track-1 Clusters.
“The announcement demonstrates the ambition and commitment that the UK has to reduce industrial emissions and to extend the life of sedimentary basins like the North Sea to meet the challenge to decarbonise.
“However, being a small, nimble and highly corrosive molecule, particularly in the presence of water, the physics and chemistry of carbon dioxide is very different from long-chained, inert hydrocarbon, controlling the sealing caprock and potential leakage pathways through its overburden.
“Consequently, it remains essential that the right sites are selected for the right reasons, something that demands a critical geological evaluation of each site.
“This technical assessment is vital and the University of Aberdeen is ready to offer its expertise, based on our leading research which is investigating the geological criteria for safe storage, the risk that legacy wells have for seal integrity and the competition for ‘offshore real estate’ between competing technologies like wind, gas fields and carbon stores.”
Nick Cooper, chief executive of Storegga, the decarbonisation development company, said: “The North Sea is a valuable asset. It gives us a real opportunity to take CO2 out of the atmosphere at scale and store this CO2 safely deep in the rocks under the North Sea. We already have the technology, the capability and the resources. The UK and Norway possess the majority of the CO2 storage capacity for Europe. Granting licenses for CO2 storage in the North Sea will kick off a green industrial revolution in the UK; a revolution that will reverse the carbon cycle. This new industry will create jobs across the UK and, importantly, also protect thousands of jobs at strategic emitters as they transition to clean fuel.
“With climate events worsening each year, it is vital we make large strides towards our carbon reduction targets. A crisis that seemed a distant threat is now affecting us in the here and now. As every second passes, the world pumps out more CO2 and our climate crisis worsens. The government must now urgently accelerate the process to get more carbon capture and storage online. These projects take time to develop. Time we cannot waste.”