Decarbonisation of European and Geman Industry

State Secretary Rikard Gaarder Knutsen held this speech at an industry seminar by Northern Lights-partnarane, Equinor, Shell & Total, Fortum og HeidelbergCement in Düsseldorf, Germany on June 12th 2019.

Ladies and Gentlemen. It is truly nice to be invited to speak here in Düsseldorf – in the industrial heartland of Germany and Europe and on such an important topic for Europe and the World. I look forward to interesting presentations and discussions.

The entire world faces a tremendous task:

  • We have to build a sustainable future.
  • We have to find solutions to combat climate change.
  • We need to provide more food, more jobs and more energy.

This will require action from all of us. And we owe it to future generations. Environmental issues and getting a job is something especially young people are more and more concerned about. The big question is – how to solve these challenges at the same time?

One of the pieces in this puzzle will have to be CCS, in particular in the industry sector and to contribute to negative emissions, so-called BECCSIn IPCC's special report on the impacts of global warming of 1,5 degree Celcius, CCS is identified as necessary in the majority of the scenarios if we are to reach the targets in the Paris Agreement. CCS is also one of seven necessary building blocks in the European Commision's proposal for a long-term strategy for Europe.

CCS is also an enabler of hydrogen in a low-emission society. Several countries, including Japan and the UK, have high ambitions for using hydrogen in the transition to a low-emission society. Hydrogen also works well with intermittent renewables because of its ability for energy storage. The more hydrogen available, the more renewable energy from wind and solar can be added to the grid.

From a Norwegian perspective CCS is one of five prioritized areas of climate efforts. We have an ambition to realise a cost effective solution for full scale CCS in Norway, provided this will result in technology development internationally.

The Norwegian government is fully committed to realising a full-scale demonstration project that makes a crucial difference to maturing CCS into commercial use. BUT that commitment is contingent on a conviction that the Norwegian project will work as a catalyst for other European projects and international technology development.

We see a growing recognition for the necessity of accelerating clean energy transition and increased climate action as well as an emerging momentum for technologies that can bring Europe to climate neutrality. The EU commissioner on energy and climate, Mr. Arias Cañete, and the Norwegian Minister of Petroleum and Energy, Mr. Freiberg, has invited to a High Level Conference on CCS in Oslo on September 5th this year. This will be a good opportunity for European Ministers, leaders from key European companies and other key stakeholders to discuss these topics.

We are looking at capturing CO2 from industrial sources. The project is now in the last planning phase before investment decision with two capture projects;

  • Norcem, a subsidiary of HeidelbergCement, will capture CO2 from their cement production.
  • Fortum Oslo Varme will capture CO2 from their Waste to Energy facility in Oslo.
  • I believe you will get more details on the projects from Heidelberg and Fortum later today.

From the industrial sources the CO2 will be transported by ship to a CO2-hub on the west coast of Norway. A partnership consisting of Equinor, Shell and Total are conducting this part of the project. The CO2 will then be sent through a pipeline to a safe CO2 storage site located underground on the Norwegian Continental shelf. Our latest cost estimates indicate an investment cost for capture, transport and storage to approximately 1-1.3 billion Euros.

Why do we think it makes sense to do this in Norway?

We have 50 years of experience from oil & gas development on the Norwegian Shelf where we have vast storage capacity which makes it possible to store CO2, also from European countries.

We have more than 20 years of experience from CO2 storage at an offshore gas field called Sleipner and 10 years from CO2 storage at a gas field called Snøhvit. It is safe to store CO2 and we have regulations that ensure this safety also in the future.

We have developed a research community with global reach centered around the CO2 Technology Centre at Mongstad where technology companies can test their technologies at an industrial pilot scale.

The objectives of the Norwegian government for storage and transport of CO2 on the Norwegian Continental Shelf is to contribute to sustainable energy and industrial production by accommodating the exploitation of sub-seabed reservoirs on the Norwegian Continental Shelf for environmentally safe CO2-storage.

The Norwegian full scale project is a true European project - strengthened by a great blend of European companies: Equinor, Shell, Total, Fortum and Heidelberg, and they are supported by European construction and engineering contractors.

This project is unique because it commercially de-links capture and storage. The storage facilities will have more capacity than what is needed for capture projects in Norway. The additional capacity is an important foundation for faster proliferation of CCS in Europe - and the level of utilisation of this capacity is the key indicator of the project's success.

We want the full-scale project to be an enabler for capturing CO2 from industries that are difficult to decarbonise without CCS.It might also contribute to negative emissions by capturing CO2 that is already in the natural carbon cycle. Some important European industries have limited or no alternatives to CCS if they are to become decarbonised - for instance, cement, steel and chemicals. CCS will contribute to preserving European jobs and industries in a low-emission society.

To realize the full potential of the CCS project, there are also some regulatory issues that we have to solve. I am confident that we will find solutions to make this happen.

Per Sandberg, representing the Northern Lights CO2-transport and storage-project will talk more about what is needed to store your CO2 on the Norwegian Continental Shelf later today.

There is a great push from the Norwegian government and  the involved companies,  Norcem, Fortum, Equinor, Total, Shell, but we need to see a lot more pull:

  • From industries that need to implement CCS in a low-emission society
  • From European countries, that need CCS if they are to meet the Paris commitments
  • The project is not straightforward, there are many issues that need to be resolved prior to a final investment decision, which we aim for in 2020. We will only make the investment if we believe that this will be the first of many, rather than the last of a few, CCS projects. I'm glad for this opportunity to present the project and to discuss what is needed for CCS to happen.

The project is not run by the government. It's a commercial project – developed by commercial companies. However, there is a need for some support to get the ball rolling. Earlier this year we agreed that the state will sponsor 75 per cent of the well cost (up to 35 million Euros) to explore a storage location in the North Sea. For the government it is important that the total costs are manageable, but it is also important that the industry picks up a large share of the costs and risks.

The Norwegian State is entering into a phase with tighter budgets and we will need to make priorities. We now have little more than a year left until the final investment decision. I urge you to spend that year on making this investment proposal irresistible – commitments from European industry, the EU and member states are vital for the Norwegian government's decision. I appreciate the companies' hard work to develop activity – and I am truly looking forward to learn more about how this looks from a European perspective at today's seminar.