UK launches first licensing round for carbon storage projects

The UK has announced its first carbon storage licensing round in what was hailed as an “important day on the path to net-zero”.

The UK has opened its first licensing round of large-scale carbon capture projects in the North Sea. It could be the first of many, as estimates suggest up to 100 carbon dioxide (CO2) stores could be needed if the UK is to meet its target of reaching net-zero by 2050.

Operated by the North Sea Transition Authority (NSTA), the licensing round is inviting bids for projects in 13 areas within the North Sea, specifically in locations off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire.

The chosen 13 areas are “a mixture of saline aquifers and depleted oil and gas field storage opportunities”, the NSTA said, adding that it has “fully considered issues including co-location with offshore wind… environmental issues and potential overlaps with existing or future [oil and gas] licences”.

The carbon capture and storage (CCS) schemes this could enable would see CO2 emissions from industry transported – either by ships or in pipelines – before being stored offshore, deep underground in geological formations.

It is expected that there will be strong competition to win the licences, which are set to be awarded in early 2023 – with the possibility of some schemes coming online within six years of the licence being granted. Applicants will also need to secure a lease from The Crown Estate or Crown Estate Scotland, as they would if they were applying to host offshore wind.

“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,” said Andy Samuel, the chief executive of the NSTA.

“Carbon storage is going to be needed across the world. There is growing investor appetite and we are keen to accelerate the development of the carbon storage sector so that the UK is well-positioned to be a global leader.

Policymakers have emphasised the importance of public-private collaboration in commercialising CCS technologies and scaling them up rapidly, to the point of describing CCC as a “non-optional” component of the UK’s transition to net-zero.

As part of this goal, the government's Ten-Point Plan specifically targets the capture of at least 20 million tonnes of CO2 annually by 2030. According to estimates by the Carbon Capture and Storage Association, achieving this aim will require at least £1.2bn of funding.

UK energy minister Greg Hands said the government was determined to “make the UK a world leader in carbon capture”, adding that this “will be crucial in helping us reduce emissions and protect the viability and competitiveness of British industry”.

To date, the UK Government has only issued six licences to carbon storage projects in the North Sea. It first began issuing licenses in 2010, under the Energy Act of 2008.

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