Norway Taps Carbon Storage Boom

In mid-December, Norway's government agreed to invest £1.5bn ($2bn) on a CO2 storage facility beneath the North Sea. Described as a game-changer, it gives the opportunity for the hard-to-decarbonise industries to clean up their emissions.

The contractors have already started dynamiting the steep rocky mountain beside the fjord to make way for tanks which will, in three years time, start receiving the world’s first deliveries of industrial CO2 emissions for storage beneath the North Sea.

“Last week, we formally had the first blast,” says Sverre Johannesen Overå, project director for the Northern Lights CO2 transport and storage project.

In mid-December, Norway’s parliament voted to spend 16.8bn kroner (£1.5bn), calling it “the largest-ever climate project in Norwegian industry”. This covers more than two-thirds of the total cost of developing and operating carbon capture at two industrial plants, as well as transport and storage of the CO2.

Northern Lights project, located near Bergen, is a partnership between Equinor, Norway’s majority state-owned energy company, and Royal Dutch Shell and the French oil major Total. When it's fully operational, the project’s facility is expected to take shiploads of CO2 from as far south as the north of Spain and as far east as Helsinki.

“I think it’s a game-changer,” Mr Overå says. “What we are doing is essentially establishing a new business, the business of managing other people’s emissions in a safe way and storing it, and that hasn’t been done before. All of a sudden, you open the opportunity for the hard-to-decarbonise industries to clean up their emissions.”

The steelmaker ArcelorMittal, the French industrial gases company Air Liquide, Heidelberg Cement, and Sweden’s Preem refining group are four of the big multinationals who plan to export CO2 to Norway from their European plants.

HeidelbergCement’s Brevik plant, outside Oslo, will be the first anchor customer, with the Norwegian government paying about 80pc of the 3.3bn kroner (£280m) cost of installing carbon capture over the next three years.

Norway’s government has agreed to invest a similar amount in installing carbon capture at Fortum Oslo Värme, a waste incinerator and district heating plant, but this is conditional on Fortum, the Finnish owner, winning 3bn kroner in funding from the European Innovation Fund. The fund is due to announce its first shortlist of projects in the first three months of this year.

If both the HeidelbergCement and the Fortum projects go ahead they will together capture 800,000 tonnes of carbon a year, equivalent to the annual carbon emissions of 400,000 cars or 3.5m return flights between London and Oslo. But for Mr Overå the focus is already on selling space in the second, commercial phase, when storage capacity will rise to 5m tonnes of CO2 per year.

He says the interest from potential customers is enormous. “Initially, we had to track down potential users, but gradually, over the last year and a half, that has completely changed, partly because we, and a few other projects, are demonstrating that there will be storage solutions, but also because of this the political shift with higher climate ambitions in Europe.”

The European Green Deal has helped, as has the €10bn (£9bn / $12.7bn) European Innovation Fund, which in November received 14 applications from carbon capture and storage projects. Mr Overå says Northern Lights is now talking to more than 60 different companies about storing their CO2. It plans to soon release its first draft carbon transport and storage contract, and hopes to sign up the first commercial customers by the end of the year.

It plans to shortly award contracts to build the first two ships, which with 7,500m3 of liquid CO2, will be the largest capacity CO2 carriers ever built. Trude Sundset, chief executive of Gassnova, the Norwegian government body tasked with establishing a carbon capture industry in Norway, believes that generous government subsidies were essential. “Yes, two-thirds of the funding is from the government, and that’s significant. But if you turn it around, for industry to pay one third is also significant,” she says.

The key has been to focus on industries for which carbon capture is currently the only feasible way to remove emissions.

Mrs Sundset argues that the project will only count as a success if others follow suit. “Norway is not just doing this for Norway. We’re doing this to help Europe to establish carbon capture and storage,” she says. “We won’t have succeeded if we don’t see other projects following us. Because we’re not going to save the planet alone.”



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