Monday 18 September 2023

The North Sea Transition Authority (NSTA) (15 September 2023) announced the list of companies which have accepted licences following the UK’s first-ever carbon storage licensing round.

A total of 14 companies have been awarded 21 licences in depleted oil and gas reservoirs and saline aquifers which cover around 12,000sq km – an area equivalent to the size of Yorkshire.

The locations could store up to 30 million tonnes of CO2 per year by 2030, approximately 10% of UK annual emissions which were 341.5 million tonnes in 2021.

Shell, Perenco and ENI have all been awarded licences off the coast of Norfolk in sites which could form part of the Bacton Energy Hub – a carbon storage, hydrogen and offshore wind project, which could provide low-carbon energy for London and the South East for decades to come and help in the drive to net zero greenhouse gas emissions.

Other locations include sites off the coasts of Aberdeen, Teesside, and Liverpool.

Stuart Payne, NSTA Chief Executive, said:

“Carbon storage will play a crucial role in the energy transition, storing carbon dioxide deep under the seabed and playing a key role in hydrogen production and energy hubs.

“It is exciting to award these licences and our teams will support the licensees to bring about first injection of carbon dioxide as soon as possible. We will also continue to work with industry and government to enable further licensing activity and back the UK’s drive to net zero emissions.”

It is estimated that as many as 100 storage licences will be needed to meet the requirements for reaching net zero and the volume of applications received for the first round demonstrated the industry’s desire for further opportunities.

The NSTA will assess the response and the quality of opportunities in locations across the UK before deciding when to run a second round.

Six licences have already been granted by the NSTA and the Government recently announced £20bn funding for the progression of these existing projects. Two locations, Hynet and the East Coast Cluster, have been selected as Track 1, while Acorn and Viking CCS projects have been chosen as the Track 2 clusters.

The cluster sequencing process was set up to give industry the certainty it requires to deploy carbon storage at pace.

An updated GIS delivery is available here, and redacted versions of all of the new licences will be published in the coming days.

Ruth Herbert, Chief Executive at the Carbon Capture and Storage Association, said:

“The CCSA welcomes the acceptance of carbon storage licences, a significant step towards achieving net zero. These licences mark a substantial milestone towards widespread deployment of CCS.

“With the potential to store almost 10% of the UK's greenhouse gas emissions in these new locations, starting to develop these sites paves the way for a cleaner and more sustainable future. The next step is a carbon capture deployment plan to enable us to fully exploit our future CO2 storage capacity.”

Lord Callanan, Minister for Energy Efficiency and Green Finance, said:

“The UK has one of the largest potential carbon dioxide storage capacities in Europe, putting us in prime position to be world leaders in carbon capture – which is why we’ve committed an unprecedented £20 billion to develop the early stage development of carbon capture, usage and storage (CCUS).

“These new licences confirmed today will be vital to realising our CCUS potential, playing a key role in the energy transition to help boost our energy security and achieve our net zero targets, while also bringing in private investment and supporting thousands of jobs.”

The NSTA, The Crown Estate (TCE) and Crown Estate Scotland (CES) are working in close collaboration to help meet the UK Government’s ambitious carbon storage targets of 20-30 million tonnes of CO2 emissions per year by 2030, and over 50 million tonnes by 2035, and make a significant contribution to net zero.