Bids invited in UK’s first-ever carbon storage licensing round
17 June 2022
The North Sea Transition Authority (NSTA) launched the UK’s first-ever carbon storage licensing round on June 14. The new carbon storage areas, alongside the six licences which have been issued previously, could have the ability to make a significant contribution towards the aim of storing 20-30 million tonnes of carbon dioxide (CO2) by 2030.
The areas being offered for licensing are off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire in the Southern North Sea, Central North Sea, Northern North Sea, and East Irish Sea and are made up of a mixture of saline aquifers and depleted oil and gas field storage opportunities.
This round is envisaged to be the first of many as it is estimated that as many as 100 CO2 stores could be required in order to meet the net zero by 2050 target, NSTA said. The Intergovernmental Panel on Climate Change report published in April 2022 emphasised the need for carbon capture and storage technologies to be deployed to reach net zero emissions from power and industry sectors.
Carbon capture and storage (CCS) involves the capture of CO2 emissions from industrial processes and will play a crucial role in decarbonising the UK’s major industrial hubs such as Teesside and Humberside. This CO2 is then transported from where it was produced, via ship or in a pipeline, and stored offshore, deep underground in geological formations.
The NSTA said it has launched this carbon storage licensing round in response to unprecedented levels of interest from companies eager to enter the market. The areas on offer have a combination of attributes such as the right geological conditions, proximity to existing infrastructure which may be able to be re-purposed, and links to industrial clusters which are looking to carbon storage to help meet their decarbonisation goals.
In choosing suitable areas to make available for licensing, the NSTA fully considered issues including co-location with offshore wind – whether there are any known challenges and mitigations around existing or future offshore wind developments – environmental issues, potential overlaps with existing or future petroleum licences, and other activities to ensure key technologies can all be taken forward.
There are currently six carbon storage licences on the UK Continental Shelf which could meet up to one-fifth of storage needs, if they reach their maximum potential of up to 40 million tonnes per annum (MTPA) injection rates by the mid-2030s. Whilst the capacity estimates of the areas offered in this round carry some uncertainty at this stage, they offer the potential to make a very significant contribution to decarbonisation of the UK.
The application window is open for 90 days, closing on September 13, and will be evaluated by the NSTA on technical and financial criteria. It is expected that any new licences will be awarded in early 2023. The size and scale of the licensed stores mean that they are likely to proceed at different paces, but first injection of CO2 could come as early as four to six years after the licence award.