UK government launches first-ever carbon storage licensing round

The North Sea Transition Authority (NSTA) has launched the UK’s first-ever carbon storage licensing round with 13 areas of potential available.

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 government’s target 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.

Key to the net zero transition

This licensing 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.

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 (formerly named the Oil and Gas Authority) says it 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.

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. In a statement the NSTA said that “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 13 September, and will be evaluated by the NSTA on technical and financial criteria.

Government CCS policy

The Government’s Ten-Point Plan, published in November 2020, supported the establishment of carbon capture, usage and storage in four clusters – in areas such as the North East, the Humber, North West, Scotland and Wales – encouraging private sector investment.

In addition to being awarded a licence from the NSTA, successful applicants will also need to obtain a lease from The Crown Estate or Crown Estate Scotland, depending on location, before they can progress a project.

Andy Samuel, NSTA Chief Executive, said: “This is an important day on the path to net zero emissions. 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.

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