Britain awards first 20 offshore carbon storage licences

Twelve companies have received 20 licences in the UK’s first-ever carbon dioxide storage licensing round, the North Sea Transition Authority (NSTA) has revealed.

Once the storage sites are in operation, they are expected to store up to 30 million tonnes of CO2 per year by 2030, approximately 10 per cent of the UK’s annual emissions. 

The licences cover an area of around 12,000 square kilometres in size, located near Aberdeen, Teesside, Liverpool and Lincolnshire.

Carbon capture and storage (CCS) technology involves filtering carbon from industrial smokestacks before it hits the atmosphere and storing it underground, to avoid it being held in the atmosphere and contributing to global warming. 

According to the NSTA, the licences include a range of geological store types and were selected following a process that considered attributes such as geology, proximity to existing infrastructure and links to industrial clusters that are expecting carbon storage to be available to help meet decarbonisation goals.

Nineteen companies applied for the licences, but only 12 were awarded these permissions, the NSTA has revealed. Of the successful applicants, Enquest and Nepture Energy have received four and three licenses, respectively. 

Spirit Energy, owned by Centrica, was awarded one licence, while Perenco was among other recipients. The names of other successful bidders cannot be announced until they officially accept the award, an NSTA spokesperson added. 

Injection into the first storage sites, consisting of a mix of depleted oil and gas fields and porous rock formations, could start within six years, the NSTA said, but first operators need to obtain leases and approvals.

These sites could be ready for injection in as little as six years.

“The awards we offer today could store around 10 per cent of the UK’s emissions, and through our engagement with applicants, we will have committed work plans in place such as seismic surveys and drilling of wells – we are working with industry to move at real pace,” said Stuart Payne, NSTA chief executive.

“The UK’s offshore waters remain the crown jewel of our energy mix, providing energy security, emissions reduction and carbon storage. This will require more and more integration and collaboration in a crowded space, and we are working closely with governments and agencies such as the Crown Estate and Crown Estate Scotland to ensure we maximise this amazing potential.”

Once a licence has been awarded by the NSTA, the licensee needs to obtain a seabed lease from the Crown Estate or Crown Estate Scotland before a project can progress. Further consents and approvals will be required ahead of any appraisal activity taking place.

“The development of the vast carbon dioxide storage available to the UK will be vital to achieving the nation’s net-zero targets and today’s announcement is a welcome step towards the greater use of this technology,” said Colin Palmer, director of marine at Crown Estate Scotland.

“Crown Estate Scotland is working closely with the NSTA, along with colleagues in the Crown Estate, Scottish & UK Governments, and interested project developers to develop appropriate access to seabed and enable greater deployment of CCS in Scottish waters, where it will complement the ambitious programme of offshore wind projects that could help transform the UK energy market.”

In the UK alone, the carbon capture and storage sector could be worth £100bn to the economy by 2050, according to an Offshore Energies UK (OEUK) report.

However, another study from researchers at Imperial College London recently found that governments routinely overestimate the amount of carbon that has been sequestered from carbon capture efforts by between 19 and 30 per cent. They argue that requiring facilities to report actual capture rates would tell us more precisely how well CCS is working and put us in a much better position to address the climate crisis.

Currently, there is no global centralised framework to compel the reporting of precise amounts of carbon captured, so actual rates of capture, transport and storage are not centrally reported.

Moreover, while the technology has been presented as a viable solution to reduce the emissions of carbon-heavy industries, it has yet to be deployed on a large scale anywhere in the world.

The announcement of the granting of the licences follows the Chancellor’s Budget early this year, where he announced the government’s plans to invest £20bn in CSS initiatives, starting with projects in the East Coast, Merseyside and North Wales.

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