The European Free Trade Association (EFTA), the state aid regulator, granted the Norwegian government permission to fund the scale-up of Carbon Capture and Storage technology (CCS). Norway will invest $2.4 billion (€2.1bn) – which is 80% of the total cost – in two large-scale CCS facilities and the infrastructure needed to transport and store the millions of tons of CO2 in subsea reservoirs.
The project’s partners, Total, Equinor, Shell, steel mill operator ArcelorMittal and Heidelberg Cement, will cover the additional $500 million (20%) in costs and play a role in the plan. The funding will cover construction costs and ten years of operation.
It is the largest, single, state aid award in history to be approved by the EFTA Surveillance Authority (ESA). EFTA hails the plan as a “groundbreaking step” towards tackling the climate crisis.
ESA President Bente Angell-Hansen, said:
Protecting the environment is at the heart of the European agenda, and ESA is pleased to work with Norway and the European Commission to find ways to support this important goal.
The CCS facilities will be built at two sites: one at a waste-to-energy power plant in the Oslo area and the other at a cement factory in Brevik. Once the facilities are running, they’ll capture all the carbon emissions from the power plant and factory before they escape into the atmosphere.
The captured emissions will be compressed and liquified, then transported to the coast and piped offshore. There, they’ll be safely stored in geological formation for permanent encapsulation. The storage part of the process will be done by a joint venture of fossil fuel firms Equinor, Total, and Shell called the Northern Lights project.
It will then be piped under the sea to an offshore storage site, where it will be injected into a. The Northern Lights carbon storage project – a joint venture between Shell, Total, and Equinor – will handle the transportation and injection. They already completed a test well for CO2 storage back in March at a site in the North Sea.
The senior vice president for project development at Equinor, Geir Tungesvik, said:
The preliminary results from the well so far have been positive. The drilling results will now be further analyzed before concluding. This is an important milestone in realizing the possibility of CO2 storage on the Norwegian continental shelf.
Anders Opedal, EVP for technology, projects and drilling at Equinor, added:
The Northern Lights project could become the first step to develop a value chain for carbon capture and storage, which is vital to reach the global climate goals of the Paris Agreement. The development of CCS projects will also represent new activities and industrial opportunities for Norwegian and European industries.
The EU will likely be seeing a lot more CCS projects in the coming years primarily because the European Commission’s recently published hydrogen strategy acknowledges that blue H2 (hydrogen produced using natural gas and CCS) may be a necessary stepping stone towards green H2 (hydrogen produced using only renewable electricity). As of now, there isn’t enough solar and wind installed to make only green H2.
