Thursday 18 May 2023

The drive to net zero emissions has taken a significant step forward (18 May) with the offer of awards for 20 carbon storage licences at offshore sites, including some near Aberdeen, Teesside, Liverpool and Lincolnshire.

The North Sea Transition Authority (NSTA) launched the UK’s first-ever carbon storage licensing round in June 2022, with applications closing in September. The 20 licences in total are around 12,000 square kilometres in size, a little bigger than Yorkshire, the UK’s largest county.

Once the new storage sites are in operation – and in some cases first injection could come in as little as six years – they could make a significant contribution to the aim of storing up to 30 million tonnes of carbon dioxide (CO2) per year by 2030, approximately 10% of total UK annual emissions, which were 341.5 million tonnes in 2021.

The offers come in the wake of the Chancellor’s Budget announcement that the Government is allocating up to £20 billion in support of developing carbon capture, usage and storage, starting with projects in the East Coast, Merseyside and North Wales.

He added that this would pave the way for CCS as the UK approaches 2050. This first carbon storage licensing round is likely to be the first of many as up to 100 CO2 stores could be needed for the UK to meet the net zero by 2050 target.

The Intergovernmental Panel on Climate Change report in April 2022 emphasised that carbon capture and storage (CCS) technologies are necessary for power and industry sectors to reach net zero emissions. It is also supported by the Climate Change Committee’s Sixth Carbon Budget which emphasises the vital role that carbon storage must play in the UK’s path to net zero.

The licences include a range of geological store types and were selected following a process which considered attributes such as the geology, proximity to existing infrastructure – as is found at Bacton off the coast of Norfolk – and links to industrial clusters which are expecting carbon storage to help meet decarbonisation goals.

The need to share offshore space with other users of the seabed such as wind developers and petroleum operations was also considered as part of the NSTA’s licensing process, recognising the need for both early engagement and continued collaboration between existing licence and leaseholders where an area of the seabed is a key resource area for different sectors.

The future success of the CCS industry requires close co-operation between a number of organisations, and once a licence has been awarded by the NSTA, the licensee also 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 on carbon storage licences.

Stuart Payne, NSTA Chief Executive, said:

“This is an exciting and important day. As a nation, we cannot meet our decarbonisation targets without carbon storage. This is net zero delivery in action.

“The awards we offer today could store around 10% 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.

“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.

“We look forward to working with these licensees to make these projects a reality as soon as possible and to opening more carbon storage rounds in the near future – my thanks to our teams and industry for their great work, but this is just the beginning.”

Lord Callanan, Minister for Energy Efficiency and Green Finance, said:

“Thanks to the government’s unprecedented £20 billion investment in early-stage carbon capture and storage development, we are in prime position to take advantage of the geological goldmine beneath our shores to store CO2, and grow our economy by becoming world-leaders in this developing industry.

“These new licences, together with fresh powers granted to NSTA within the landmark Energy Bill, will develop our most comprehensive picture yet of UK’s carbon capture and storage potential, strengthening our energy security and cutting emissions while creating thousands of skilled British jobs.”

Gus Jaspert, Managing Director of Marine at The Crown Estate, said:

“Today’s announcement is a welcome step forward in bringing the UK closer to offshore carbon injection, crucial to meeting the UK’s net zero targets. As managers of the seabed around England, Wales and Northern Ireland, The Crown Estate is committed to designing and delivering the required leasing process for CCUS developers, ensuring this works for all marine users and respects our vital coastal environments and habitats.

“We look forward to continuing to work with NSTA and other partners in this sector on developing this important market.”