Page 16 - EurOil Week 36

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The UK’s Acorn project
will produce hydrogen
from North Sea gas
and capture and
store carbon from the
process.

European CCS spending to reach

$35bn by 2035: Rystad

EUROPE EUROPE’S carbon capture and storage (CCS) out CCS as a climate mitigation tool, saying the
market could see some $35bn in spending technology is not proven and available, and
between now and 2035, according to new has unrealistic expectations,” Rystad’s head of
research by Oslo-based consultancy Rystad energy service research, Audun Martinsen, com-
Energy. mented. “For CCS to have a significant future,
CCS has been hailed as the answer for decar- it’s therefore important that Northern Lights and
bonising industries that cannot easily shift to Acorn run through their pilot stages to show that
renewable power, and as a means of making this can be a proven technology.”
gas-derived hydrogen energy clean. Interest in CCS will have to “prove cost-worthy” as it
the technology has only grown in recent years, faces competition from Europe’s growing wind
as governments commit to ever more ambitious and solar energy sectors, whose technologies are
climate goals. reaching maturity.
Europe has been researching and trialling There are currently only two CCS projects
CCS for decades. But the sector is now reaching in operation in Europe, at Norway’s offshore
a tipping point where large-scale developments Sleipner and Snohvit fields, with a combined
make financial sense, according to Rystad. This capacity of 1.5mn tonnes per year. However, Rys-
could trigger up to $35bn in spending over the tad estimates that the continent’s capacity could
next 15 years. rise by 3mn tpy on average between 2021 and
There are 10 major upcoming projects in 2025, accelerating to 7mn tpy in the latter half
Europe with a high chance of coming online by of the decade.
2035. Most are located in the North Sea region, Capacity could hit 75mn tpy by 2035, it said,
where producers are looking at ways of making noting that UK projects would account for
the oil and gas they extract cleaner. Chief among nearly 80% of this amount.
them are the Acorn CCS scheme in the UK, Nor- “Looking at the bigger picture, Europe
way’s Northern Lights project and the Porthos has about 1,000 larger industrial sites, such as
venture in the Netherlands. cement plants, steel producers, fossil power and
Acorn CCS will produce hydrogen from waste-to-energy plants, that could all be candi-
North Sea gas arriving at the St Fergus termi- dates for capturing CO2,” Rystad said. “About
nal and capture and store the carbon released 250 of these have reasonable shipping distance
from the process. Northern Lights, meanwhile, to send CO2 to be stored in the North Sea.”
aims to establish a supply chain for capturing Capital investments in CCS are anticipated to
and transporting carbon produced in Europe reach $30bn by 2035, the consultancy said, while
and storing it in North Sea reservoirs. Porthos operational expenditure will total $5bn. Around
will similarly take carbon emitted at refineries, half of capex will go towards facilities at the
chemical and hydrogen plants at the port of Rot- source, with CO2-capture equipment and facil-
terdam and store it offshore. ity construction accounting for the lion’s share.
A lot is riding on the success of these projects. Storage investments should make up around
If they deliver good results, they will de-risk the 15%, Rystad said, mainly consisting of well-re-
uncertainty surrounding CCS and clear a path lated services to store CO2 underground, while
for larger investments in the future. transport operations will amount to 35% and
“Several European policymakers and NGOs relate to trunk lines, shipping and infrastructure
have previously indicated they are ready to rule maintenance costs. ™

P16 www. NEWSBASE .com Week 36 10•September•2020