21 carbon storage licenses awarded in UK’s landmark licensing round

21 carbon storage licenses awarded in UK’s landmark licensing round

A total of 14 companies have been awarded 21 licenses in the UK’s first-ever carbon storage licensing round – said to have the potential to store almost 10% of UK greenhouse gas emissions.

The North Sea Transition Authority (NSTA) announced on 15 September that 14 companies had accepted licenses in depleted oil & gas reservoirs and saline aquifers which cover around 12,000 square kilometers.

The locations could store up to 30 million tonnes of CO2 per year by 2030, approximately 10% of UK annual emissions which were 341.5 million tonnes in 2021. 

The NSTA launched the UK’s first-ever carbon storage licensing round in June 2022, with applications closing in September

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Shell, Perenco and Eni have all been awarded licenses off the coast of Norfolk in sites that could form part of the Bacton Energy Hub – a carbon storage, hydrogen and offshore wind project, which could provide low-carbon energy for London and the South East for decades. Other locations include sites off the coasts of Aberdeen, Teesside, and Liverpool. 

“Carbon storage will play a crucial role in the energy transition, storing carbon dioxide deep under the seabed and playing a key role in hydrogen production and energy hubs,” said Stuart Payne, NSTA Chief Executive.

“It is exciting to award these licences and our teams will support the licensees to bring about first injection of carbon dioxide as soon as possible. We will also continue to work with industry and government to enable further licensing activity and back the UK’s drive to net zero emissions.” 

It is estimated that 100 storage licenses will be needed to meet the requirements for reaching net zero and the volume of applications received for the first round demonstrated the industry’s desire for further opportunities, the NSTA said, adding that it will assess the response and the quality of opportunities in locations across the UK before deciding when to run a second round. 

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Six licenses have already been granted by the NSTA and the UK Government recently announced £20 billion in funding for the progression of these existing projects. Two locations, Hynet and the East Coast Cluster, have been selected as Track 1, while Acorn and Viking CCS projects have been chosen as the Track 2 clusters.

“The CCSA welcomes the acceptance of carbon storage licences, a significant step towards achieving net zero. These licences mark a substantial milestone towards widespread deployment of CCS,” said Ruth Herbert, Chief Executive at the Carbon Capture and Storage Association.

“With the potential to store almost 10% of the UK’s greenhouse gas emissions in these new locations, starting to develop these sites paves the way for a cleaner and more sustainable future. The next step is a carbon capture deployment plan to enable us to fully exploit our future CO2 storage capacity.”

The NSTA is collaborating with the Crown Estate (TCE) and Crown Estate Scotland (CES) to help meet the UK Government’s carbon storage targets of 20-30 million tonnes of CO2 emissions per year by 2030, and over 50 million tonnes by 2035, and make a significant contribution to net zero.

In a separate statement, Harbour Energy reported it had secured four carbon storage licenses from the NSTA as part of the UK’s recent CO2 storage licensing round.

The company, as operator of the Humber-based Viking CCS CO2 transportation and storage network, and its non-operating partner BP have been awarded two licenses located adjacent and to the west of the existing Viking CCS carbon storage license in the Southern North Sea

Furthermore, the Acorn CCS project in northeast Scotland has also been awarded two additional storage licenses. Harbour has a 30% non-operated interest in Acorn, which is operated by lead developer Storegga.

“The award of these new licences is another important step forward to help scale up our carbon capture, transportation and storage plans in the UK, and another demonstration of the valuable role the oil and gas sector can bring to the development of this nascent industry,” said Steve Cox, Harbour Energy Executive Vice President of Net Zero and CCS.

“The potential for additional storage capacity could play a vital role in supporting the UK to meet its net zero goals while also creating thousands of skilled British jobs.”