Page 6 - LatAmOil Week 46

LatAmOil COMMENTARY LatAmOil

CCS technology gains momentum

Carbon capture and storage plans are gaining momentum as countries commit to tougher targets

CARBON, capture and storage (CCS) has been Sleipner and Snohvit fields, with a combined
touted as the best means of decarbonising large storage capacity of 1.5mn tonnes per year (tpy).
WHAT: swathes of heavy industry that cannot easily be But here the technology is used only to capture
CCS appears to be finally made clean using renewable energy alone. CO2 mixed in the natural gas that is produced at
taking flight, with the IEA The technology’s potential has been dis- the fields, rather than for abating emissions from
estimating that projects cussed for years but now appears to be finally general industry.
worth $27bn worldwide gaining momentum, in large part thanks to However, Norwegian state oil company
are close to reaching a countries committing to tougher targets for Equinor wants to apply the experience it has
final investment decision. reducing their greenhouse gas (GHG) emis- gained at Sleipner and Snohvit to a more ambi-
sions. The International Energy Agency (IEA) tious project known as Northern Lights. North-
WHY: estimated in September that CCS projects worth ern Lights represents the transport and storage
The technology can help $27bn are close to reaching a final investment part of Norway’s Longship scheme.
decarbonise industries decision (FID). Longship will initially involve the capture
that cannot easily be The IEA concludes that it will be “virtually of CO2 emitted from a cement factory in Bre-
made clean otherwise, impossible” for the world to meet targets for vik and a waste incineration plant in Oslo. The
and is used to pro-
duce low-carbon blue reducing GHG emissions without deploying waste gas will then be liquefied and transported
hydrogen. CCS on a significant scale. Certain industries, via ships to a reception terminal north-west of
such as steelmakers and cement factories, have Bergen. From there it will be pumped via pipe-
WHAT NEXT: few other feasible options for decarbonising line to an aquifer in the North Sea for permanent
Projects currently secure their operations, the Paris-based agency argues. storage.
government financing on But CCS still has a long way to go before it Northern Lights’ initial storage capacity will
a case-by-case basis, but can make a meaningful dent in emissions. The be 1.5mn tpy, but Equinor and its partners are
broader incentives, in- IEA estimates that for the world to reach net hoping to upscale the project to 5mn tpy at a
cluding a high enough tax zero by 2070, then the volume of CO2 captured later point. By this stage, it is expected that the
on CO2, will be needed would have to grow 20-fold in just a decade. scheme will not only handle CO2 from Nor-
for the sector to realise The technology is also of growing interest wegian industry but also industry elsewhere in
its potential. to oil and gas companies, eager to decarbon- Europe.
ise as much of their activities as they can to Equinor’s stated ambition is to transport and
demonstrate their commitment to the energy capture CO2 at a cost of €35-50 ($42-60) per
transition. tonne by 2030. This means that without other
CCS also serves a vital role in capturing the policies in place, carbon tax will have to rise
CO2 that is produced when natural gas is con- significantly to make Northern Lights commer-
verted into hydrogen via methane reforming. cially feasible. Under the EU’s emissions trading
This low-carbon, so-called blue hydrogen can system, in which Norway takes part, emitters
also play a part in decarbonising certain sectors, must pay just above €30 per tonne of CO2. And
such as energy-intensive industries and mari- the costs at Northern Lights do not factor in the
time and other areas of transport. expense of capturing the CO2.
The consensus among scientists and inves- The overall cost at Longship is projected at
tors is that large-scale deployment of CCS is pos- NOK25.1bn ($2.6bn), including NOK17.1bn in
sible, but will require significant state support. investment and NOK8bn in operating costs over
Governments are currently looking to finance its first 10 years. In September, Norway’s govern-
the technology on a project-by-project basis, but ment proposed some NOK16.8bn in state sup-
broader incentives, including a high enough tax port for the sector, although it is yet to take the
on CO2, will be needed for the sector to live up FID needed to commit these funds.
to its potential. In this special feature, we take a Over in the UK, various consortia have been
look at some of the countries at the forefront of working on plans to decarbonise the Humber
CCS development. and Teesside industrial clusters using CCS. The
Zero Carbon Humber (ZCH) and Net Zero
Europe Teesside (NZT) projects aim to capture 17mn
Europe has been researching and trialling CCS tpy and 10mn tpy of CO2 respectively. The
for decades, but the sector is now reaching a tip- CO2 will be stored offshore under the Northern
ping point, with a number of major projects now Endurance Partnership (NEP) scheme.
working towards FIDs. Many of the schemes are NZT and ZCH also comprise sub-projects to
situated in North-west Europe, where offshore produce blue hydrogen from gas arriving from
reservoirs can be used for storage. the North Sea. Similar developments are also
There are currently only two CCS projects underway in Merseyside in England and St Fer-
in operation in Europe, at Norway’s offshore gus in Scotland.

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