Offshore CCS in the UK and Europe – Two steps forward, one step back?

The drive to store waste CO₂ emissions is growing as we edge ever closer to decarbonisation deadlines. But the journey appears to be far from smooth. Whilst Northwest Europe is certainly at the leading edge of offshore storage developments, bureaucracy and politics appear to be hampering efforts.

Storage sites or “sinks” – there are plenty!

No sink means no project. Thankfully there appears to be no shortage of sites available, particularly in the Norwegian, UK and Danish sectors. Norway has recently added two licenses, meaning they have now awarded six licenses in total, and the UK already has six.

The UK was expected to have awarded many more licenses within Q1-23 but for reasons not yet given, that has not happened. The North Sea Transition Authority (NSTA) who are the UK licensing authority, have missed their own deadline. Ironically, this comes at a time when the Department for Energy Security and Net Zero (DESNZ) has announced the first batch of UK projects, forming part of the previously selected Track 1 initiatives (HyNet and East Coast Cluster) which could now dip into a £20 billion funding pot. That pot is not accessible to everyone and getting to Track 1 status seems to have been a tough and complicated job. If you are an industrial emitter in the UK, with the will to capture and store your emissions, getting government support may not be easy unless you are part of one of these initiatives which encompass several projects (blue hydrogen etc) designed to decarbonise industrial zones and provide jobs and infrastructure.

Progress appears slow

The NSTA states that 75-180 million tonnes of CO₂ per year need to be captured and stored by 2050 (one third of the UK’s 2020 baseline). They have no doubt the required sinks will be there as they estimate 78 billion tonnes of potential capacity in the UK sector alone (assuming these stores are surveyed, licensed, and utilised). Yet to date, only two UK initiatives have access to significant funds for some of their associated projects.

HyNet claims to have capacity to store 10 million tonnes per year by 2030 and East Coast Cluster a potential 23 million tonnes per year by 2035. On the face of it, progress is positive but slow – something which is perhaps not so different in the rest of Europe. Norway, or at least Northern Lights, is the exception but that project has the all-important funding in place, on the back of which, two 7,500 cbm vessels are under construction in China, with two more possibly on order.  

There is no shortage of infrastructure initiatives

The number of projects in Europe is growing. As licenses are awarded in the Norwegian and Danish sectors, companies who have those licenses are hooking up with European emitters and aggregators to attract CO₂ to their sinks. In some cases, they have existing pipeline infrastructure but in others they will be wholly dependent on shipping (albeit they may have pipeline aspirations, longer term).

New, potential sequestrators are emerging in several locations, and they could provide storage for emissions coming from outside their immediate vicinity. This means, if you are an emitter in the UK or Europe, and you have no pipeline connection, you have a growing choice of sequestrators vying for your waste CO₂. This is good news in that it will create a more competitive environment for storage where pricing will become more transparent. It will also encourage best strategic practice for shipping solutions. As things stand, only Northern Lights is able to offer storage on a firm basis, but that will change in time.  

While the West sleeps

As yet, we have not even touched on developments in Asia. Whilst regulatory pressures there might be different, the interest and willingness to store CO₂ offshore is nonetheless well established – and growing. In Asia, the challenge comes from having to move relatively larger cargoes over longer distances to offshore locations many more days away from industrial areas than we have here in Europe. If projects in Europe do not receive more immediate support, our information suggests that Asia could potentially catch up and overhaul Europe in CCS volumes.

Watch this space!

Clarksons’ specialist experience within liquid CO₂ transportation

The Clarksons Gases team is firmly established at the heart of the global gas markets with an unrivalled track record in providing shipping and trade-related services for LPG, ammonia, petrochemical gases, and LNG. We are determined to become equally proficient in the emerging, seaborne CO₂ business and have formed a specialist team within Gases department.

The specialist team continues to work closely with other divisions within Clarksons to ensure we remain at the forefront of developments in the sector. Our knowledge base on CO₂ has increased significantly and we are confident of being able to assist you with your CO₂ projects and shipping strategy.

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