Page 6 - EurOil Week 46

EurOil COMMENTARY EurOil

CCS technology gains momentum

Carbon, capture and storage technology is finally gaining momentum, in

large part thanks to countries committing to tougher emissions targets

GLOBAL CARBON, capture and storage (CCS) has been There are currently only two CCS projects
touted as the best means of decarbonising large in operation in Europe, at Norway’s offshore
WHAT: swathes of heavy industry that cannot easily Sleipner and Snohvit fields, with a combined
CCS appears to be finally be made clean using renewable energy alone. storage capacity of 1.5mn tonnes per year (tpy).
taking flight, with the IEA The technology’s potential has been discussed But here the technology is used only to capture
estimating that projects for years but now appears to be finally gaining CO2 mixed in the natural gas that is produced at
worth $27bn worldwide momentum, in large part thanks to countries the fields, rather than for abating emissions from
are close to reaching a committing to tougher targets for reducing their general industry.
final investment decision. greenhouse gas (GHG) emissions. The Interna- However, Norwegian state oil company
tional Energy Agency (IEA) estimated in Sep- Equinor wants to apply the experience it has
WHY: tember that CCS projects worth $27bn are close gained at Sleipner and Snohvit to a more ambi-
The technology can help to reaching a final investment decision (FID). tious project known as Northern Lights. North-
decarbonise industries The IEA concludes that it will be “virtually ern Lights represents the transport and storage
that cannot easily be impossible” for the world to meet targets for part of Norway’s Longship scheme.
made clean otherwise, reducing GHG emissions without deploying Longship will initially involve the capture
and is used to produce CCS on a significant scale. Certain industries, of CO2 emitted from a cement factory in Bre-
low-carbon blue such as steelmakers and cement factories, have vik and a waste incineration plant in Oslo. The
hydrogen. few other feasible options for decarbonising waste gas will then be liquefied and transported
their operations, the Paris-based agency argues. via ships to a reception terminal north-west of
WHAT NEXT: But CCS still has a long way to go before it can Bergen. From there it will be pumped via pipe-
Projects currently secure make a meaningful dent in emissions. The IEA line to an aquifer in the North Sea for permanent
government financing on estimates that for the world to reach net zero by storage.
a case-by-case basis, 2070, then the volume of CO2 captured would Northern Lights’ initial storage capacity will
but broader incentives, have to grow twentyfold in just a decade. be 1.5mn tpy, but Equinor and its partners are
including a high enough The technology is also of growing interest to hoping to upscale the project to 5mn tpy at a later
tax on CO2, will be oil and gas companies, eager to decarbonise as point. By this stage, it is expected that the scheme
needed for the sector to much of their activities as they can to demon- will not only handle CO2 from Norwegian
realise its potential. strate their commitment to the energy transi- industry but also industry elsewhere in Europe.
tion. CCS also serves a vital role in capturing the Equinor’s stated ambition is to transport and
CO2 that is produced when natural gas is con- capture CO2 at a cost of €35-50 ($42-60) per
verted into hydrogen via methane reforming. tonne by 2030. This means that without other
This low-carbon, so-called blue hydrogen can policies in place, carbon tax will have to rise
also play a part in decarbonising certain sectors, significantly to make Northern Lights commer-
such as energy-intensive industries and mari- cially feasible. Under the EU’s emissions trading
time and other areas of transport. system, in which Norway takes part, emitters
The consensus among scientists and investors must pay just above €30 per tonne of CO2. And
is that large-scale deployment of CCS is possible, the costs at Northern Lights do not factor in the
but will require significant state support. Gov- expense of capturing the CO2.
ernments are currently looking to finance the The overall cost at Longship is projected at
technology on a project-by-project basis, but NOK25.1bn ($2.6bn), including NOK17.1bn in
broader incentives, including a high enough tax investment and NOK8bn in operating costs over
on CO2, will be needed for the sector to live up its first 10 years. In September, Norway’s govern-
to its potential. In this special feature, we take a ment proposed some NOK16.8bn in state sup-
look at some of the countries at the forefront of port for the sector, although it is yet to take the
CCS development. FID needed to commit these funds.
Over in the UK, various consortia have been
Europe working on plans to decarbonise the Humber
Europe has been researching and trialling CCS and Teesside industrial clusters using CCS. The
for decades, but the sector is now reaching a tip- Zero Carbon Humber (ZCH) and Net Zero
ping point, with a number of major projects now Teesside (NZT) projects aim to capture 17mn
working towards FIDs. Many of the schemes are tpy and 10mn tpy of CO2 respectively. The
situated in North-west Europe, where offshore CO2 will be stored offshore under the Northern
reservoirs can be used for storage. Endurance Partnership (NEP) scheme.

P6 www. NEWSBASE .com Week 46 19•November•2020