Meld. St. 33 (2019–2020)

Longship – Carbon capture and storage — Meld. St. 33 (2019–2020) Report to the Storting (white paper)

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2 The background for prioritising CCS

2.1 The Paris Agreement as the basis for prioritising CCS

The 2015 Paris Agreement was adopted in recognition of the irreversible loss and damage being caused by climate change and the serious threat it poses to nature and society. Together with growing pressure on natural resources and land area accompanied by the loss of species and ecosystems, climate change is a serious threat to the world’s capacity to provide fundamental services, such as clean water, sufficient food and safe homes.

The goal of the Paris Agreement is holding the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial level, and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels. To achieve the long-term temperature goals, the parties agreed that they would aim to reach peak global greenhouse gas emissions as quickly as possible, and to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.

A number of countries, including the EU, have committed to a net-zero target, or to be climate-neutral, by 2050. These targets mean that emissions must be equivalent to the removal of greenhouse gases. This could be achieved by increasing the natural sequestration of CO2 in e.g. agriculture, forestry and other land use, or by capturing and permanently storing CO2 in geological reservoirs.

Norway’s Nationally Determined Contribution under the Paris Agreement is to reduce greenhouse gas emissions by at least 50 per cent and up to 55 per cent in 2030, compared with the 1990 level [1]. The main goal of the Norwegian Climate Change Act is that Norway will be a low-emission society by 2050. The Norwegian Government proposed in the autumn of 2019 a low-emission strategy in accordance with the Government’s political platform, ‘Granavolden’. The strategy proposes to increase the rate of reduction of greenhouse gas emissions for 2050 by 90–95 per cent compared with 1990 levels. The effect of Norway’s participation in the EU Emissions Trading System must be taken into account when assessing whether this target has been reached.

As the world moves towards the long-term goal of the Paris Agreement, it will be important to shift production to goods and services that are competitive as the price of emissions rises, stricter regulation of emissions is introduced and consumer preferences change. Technology development, resource efficiency, better use of energy, more use of renewable raw materials and input factors, and circular solutions and waste management will all be important elements in the transition to a low-emission society. In many industries, a long-term focus on technology development and dissemination will be needed.

Norway has strong ties to Europe. The EU is our most important trade partner and closest climate partner. Through the cooperation with the EU and Iceland, Norway will also take part in EU climate legislation in the period 2021–2030. This will be an important part of the framework for Norway’s climate policy and ensure a shift to a low-emission pathway in line with neighbouring countries. All sectors in Norway are included in the same system as applies in the EU under the agreement. Norway is seeking to fulfil its enhanced ambition through its cooperation on climate action with the EU. The Government is therefore encouraging the EU to step up its goal for 2030 to 55 per cent. The European Commission has proposed increasing the EU’s target for 2030 to 55 per cent.

In the event that Norway’s enhanced Nationally Determined Contribution goes beyond the target set in the updated Nationally Determined Contribution of the European Union, Norway intends to use voluntary cooperation under Article 6 of the Paris Agreement to fulfil the part that goes beyond that fulfilled through its climate cooperation with the European Union.

The Paris Agreement and the climate agreement with the EU and Iceland provide the framework and foundation for Norway’s investment in carbon capture and storage (CCS). The Norwegian demonstration project for full-scale CCS underlines the need for and value of international cooperation on technological development and emission reductions. If CCS is to become an efficient and competitive climate policy instrument, new projects must follow suit in Europe and globally.

2.2 What is carbon capture and storage?

Figure 2.1 Illustration of carbon capture from different industrial facilities and power production, transport by pipeline and ship, geological CO2 storage

Figure 2.1 Illustration of carbon capture from different industrial facilities and power production, transport by pipeline and ship, geological CO2 storage

Source Gassnova

Different industrial processes, power, and heat production release large amounts of CO2 into the atmosphere. CO2 is a by-product of the processing of various raw materials and combustion of different fuels. These CO2 emissions can be reduced by capturing CO2 and then transporting and permanently storing it, thus preventing its release into the atmosphere. We can also capture CO2 directly from the air. The characteristics of the various sources of emissions from which it is possible to capture CO2 can vary considerably. Major differences in temperature, pressure, CO2 content and other content, mean that carbon capture can take many different forms. It also means that the costs of carbon capture vary a great deal. Different technologies on the market are suited to the different sources of emissions. Most of the available technologies on the market for capturing flue gas from today’s industry and power production are different forms of amine technology.

Textbox 2.1 Same thing, different names – concepts

Carbon capture and storage, CCS, carbon control and sequestration – these are all overlapping terms that have been used to describe much the same thing. Carbon capture, utilisation and storage or CCUS can also refer to the use of CO2 for example to enhance oil recovery. We can therefore distinguish between carbon capture and storage for climate purposes, where CO2 is stored permanently, and carbon capture and storage where CO2 is not permanently stored. Unless otherwise specified, the meaning of carbon capture and storage in this white paper is in the context of climate efforts.

If such use of CO2 is to have a positive effect on the climate, CO2 must be permanently removed from the atmosphere. The term Bioenergy with Carbon Capture and Storage or BECCS/bio-CCS has been used to describe the capture and storage of CO2 from energy production that uses biogenic matter (matter formed by biological processes).

CO2 can be transported by pipeline or in tanks, for example on ships or tankers. CO2 transport by pipeline has taken place in the US for close to 50 years, and in Norway since 1996. An example is CO2 transported from the Melkøya LNG plant through a 145-kilometre pipeline to a reservoir on the Snøhvit natural gas field. CO2 transport by ship and road is already part of the routine operations of the food industry for instance, although in lesser volumes.

CO2 can be stored in suitable geological formations both underground on land and beneath the seabed. These include geological formations in salt water (saline aquifers), depleted oil fields or in connection with increased extraction in oil fields. Geological mapping conducted by the Geological Survey of Norway indicated that Norway does not have suitable underground geological formations on land. It is therefore only possible for Norway to store CO2 under the seabed on the Norwegian continental shelf. Norway has stored CO2 from the Sleipner field for nearly 25 years and from the Snøhvit field since 2008. The Petroleum Directorate has prepared a CO2 Storage Atlas that covers the whole Norwegian continental shelf [2]. The atlas shows that more than 80 billion tonnes of CO2 can theoretically be stored on the continental shelf. This corresponds to Norway’s greenhouse gas emissions for more than a thousand years. Such theoretical potential is uncertain and does not take costs into account. The Petroleum Directorate has categorised a capacity of around 1.25 billion tonnes of CO2 as the expected amount for effective and safe storage.1 Identifying CO2 storage locations is costly and time consuming. It is also important that the CO2 storage locations are secure and can be properly monitored.

Figure 2.2 CO2 Atlas for the Norwegian Continental Shelf

Figure 2.2 CO2 Atlas for the Norwegian Continental Shelf

Source The Petroleum Directorate

2.3 CCS and the Sustainable Development Goals

2.3.1 Climate targets and the role of CCS

The reports from the UN Intergovernmental Panel on Climate Change and the International Energy Agency (IEA) show that CCS will be necessary to reduce global greenhouse gas emissions in line with the climate targets at the lowest possible cost. The findings in the UN Intergovernmental Panel on Climate Change’s Fifth Assessment Report states that if CCS is not used, the global costs of keeping the global increase in average temperature below 2 degrees Celsius may be more than doubled [3].

Subsequent reports from both the UN Intergovernmental Panel on Climate Change and the IEA have also shown that achieving the Paris Agreement’s global temperature goals will be very challenging, particularly pursuing efforts to limit the global increase in average temperature to 1.5 degrees Celsius, without CCS. The alternative is achieving even more rapid emission reductions, which entails a more intensive restructuring of industry, energy systems and consumer patterns [4]. The climate panel’s models are mainly based on negative emissions. This can be achieved, for example, by capturing and storing CO2 from biofuel production or combustion of biogenic matter (BECCS/bio-CCS).

Biogenic matter includes wood, biogases and biodegradable waste. The removal of biogenic CO2 entails negative emissions since the biomass has absorbed CO2 throughout its lifetime. The climate effect of capturing and storing biogenic CO2 is therefore considered to be zero in air emissions accounts.

It is also possible to achieve negative emissions by capturing CO2 directly from the air, or increasing sequestration of CO2, for example by planting forests. Most low-emission scenarios considered by the UN Intergovernmental Panel on Climate Change require negative emissions to compensate for emissions that are challenging or extremely costly to remove.

Figure 2.3 Distribution of global net emissions of CO2 in four illustrations of modelled emission pathways

Figure 2.3 Distribution of global net emissions of CO2 in four illustrations of modelled emission pathways

Source UN Intergovernmental Panel on Climate Change [4]

CICERO Center for International Climate Research has concluded that CCS is one of several critical technologies in most emission pathways to achieve the Paris Agreement’s temperature goals, and that it will be extremely challenging to reduce emissions quickly enough without CCS [5]. There are three reasons why CCS may be necessary: Firstly, it may be challenging to reduce emissions to net zero quickly enough without using CCS on the sources of emission or by contributing to negative emissions. Secondly, there are currently no competitive alternatives to CCS for certain sectors, such as cement, steel, and long-distance sea and air transport, and nor is it certain that there will be in the future. Thirdly, CCS may be the cheapest and best way of reducing emissions for some sectors and sources of emissions. CICERO has stressed that it is likely that public funding of innovation will be necessary to ensure that CCS is sufficiently utilised.

In Energy Technology Perspectives 2020 [6], the IEA highlights CCS as one of four technologies that are critical to achieving the climate targets. The IEA emphasises the importance of building infrastructure and demonstrating technology in order to stimulate innovation related to clean energy. The IEA’s models of the years leading up to 2030 show that the scope of CCS in both industry and power production needs to increase significantly. The report also states the importance of developing clusters of capture facilities that connect to a joint storage facility in order to increase utilisation of CCS and to create business models [3].

The IEA’s Sustainable Development Scenario illustrates a transformation of the global energy system showing how the world can change course to reach the three Sustainable Development Goals most relevant to energy at the same time [7]. The Sustainable Development Goals the IEA has based its scenario on are Affordable and clean energy (Goal 7), reduce the severe health impacts of air pollution (part of Goal 3) and Climate action (Goal 13). The scenario corresponds to a 66 per cent probability of keeping the global temperature increase to within 1.8 degrees Celsius without being dependent on negative global CO2 emissions. As shown in Figure 2.4, carbon capture, use and storage represents 9 per cent of the cumulative emission reduction between 2018 and 2050 in the IEA’s Sustainable Development Scenario [6, 8].

Figure 2.4 Energy-related emission reductions in the IEA’s Sustainable Development Scenario 2019 [8]

Figure 2.4 Energy-related emission reductions in the IEA’s Sustainable Development Scenario 2019 [8]

Source IEA World Energy Outlook 2019 [8]

CCS may also be a relevant and necessary solution to achieve Norway’s emission reduction targets. In addition to the overall emission targets for 2030 that Norway has endorsed under the Paris Agreement, and the goal to become a low-emission society by 2050, the Granavolden platform states that the Government wants to reduce Norway’s emissions in sectors not included in the Emissions Trading System by at least 45 per cent by 2030 compared to the 2005 level. The Government aims to achieve this reduction by means of domestic measures, and is planning for this. If strictly necessary, the flexibility of the EU framework can be utilised. Over time, more ambitious climate targets will require a restructuring of existing industry [9-11].

Textbox 2.2 Distinction between sectors included and not included in the European Emissions Trading System

Norway has participated in the European Emissions Trading System (EU ETS) since 2008 and cooperates with the EU and Iceland on reducing emissions from sectors included in the system. The goal is to reduce emissions from sectors included in the EU ETS by 43 per cent compared to the 2005 level. The system currently applies to emissions from installations in industry, energy supply and aviation within the EEA.

Around half of Norway’s emissions are covered by the EU ETS. The primary sources of emissions within the ETS system (on a European scale, not Norway specifically) are natural gas and coal fired power plants, on-site energy installations in business and industry, petroleum production including offshore facilities, refineries, wood-processing industry, and production of steel, aluminium, mineral fertiliser, cement and lime. Sectors included in the EU ETS in Norway contribute on the same basis as with those of other European countries to reaching the emission target.

Norway’s participation in the EU ETS is an important aspect of Norwegian climate policy and the strategy for meeting our 2030 obligations. With unified efforts to meet the climate agreement with the EU and Iceland, emission reductions within the EU ETS will be assessed for the EU, Iceland and Norway together. The primary sources of emissions from sectors that are not included in the EU ETS are transport, agriculture, construction and waste, but also emissions from industry and petroleum activities that are not subject to the trading system.

As part of the agreement with the EU and Iceland, Norway will also cooperate with the EU on reducing emissions from sectors not included in the EU ETS (The Effort Sharing Regulation). The EU aims to cut overall emissions from these sectors by 30 per cent from 2005 to 2030. The efforts needed to achieve this are to be distributed between countries by means of binding emission targets. Norway’s emissions target under its agreement with the EU is to cut emissions from sectors not included in the EU ETS by 40 per cent.

2.3.2 Carbon capture and storage in different sectors

Industry currently accounts for around a fifth of global greenhouse gas emissions [12], most of which come from the production of raw materials such as metal, cement and chemicals. In Norway, industry accounts for 23 per cent and oil and gas production for 28 per cent of emissions, calculated in CO2 equivalents (CO2e).2 Global growth in terms of both population and prosperity leads to increased use of raw materials. Emissions come primarily from production processes, and reducing emissions will require new technology to be developed and used [11].

CCS is particularly important in industries that cannot sufficiently reduce their CO2 emissions by changing their source of energy, such as the steel and cement industries [12, 13]. With the knowledge currently available, it will be extremely challenging to maintain current industry and achieve our climate targets by 2050 without using CCS [10]. CCS appears to be the most promising solution to drastically reduce emissions from the processing industry [14].

The energy sector is the sector that accounts for the largest share of global greenhouse gas emissions [15]. CCS can reduce emissions from energy production based on coal, natural gas and biomass [11]. The power sector can also cut emissions by switching to renewable energy sources. A solution in the long term could be to produce energy from hydrogen, either by electrolysis (using renewable energy sources) or from natural gas with CCS [6, 11].

In the long term, it will be necessary to increase the amount of negative emissions, for example by capturing and storing more biogenic CO2 [8, 16]. Models developed by the UN Intergovernmental Panel on Climate Change and the IEA also show that in the longer term, technology to capture CO2 directly from the air is required. At present, such technologies use a lot of renewable energy and cost more than capturing emissions from industry and power production [6]. The development and use of technologies that lead to negative emissions and carbon capture directly from the air are dependent on the commercialisation of carbon capture technology in industry, thus making it more widely available and cheaper.

Waste incineration for energy production produces CO2 emissions. Part of the waste comes from fossil raw materials and produces greenhouse gas emissions, but often, waste also contains some bio-based materials. Using CCS for waste incineration may therefore lead to negative CO2 emissions. All countries have waste incineration facilities and this therefore has the potential to significantly reduce European emissions [17, 18]. The possibility of using BECCS in certain countries such as Sweden to achieve rapid emission reductions has also been identified [19].

In 2018, Norway’s emissions from waste incineration represented just under 1 million tonnes of CO2e [20].

Textbox 2.3 Climate Cure 2030

Klimakur (Climate Cure) 2030 describes measures that can cut emissions in sectors not included in the EU ETS by 50 per cent by 2030 compared to 2005 levels. Climate Cure was put together by the Norwegian Environment Agency, the Norwegian Public Roads Administration, the Norwegian Coastal Administration, the Norwegian Agriculture Agency, the Norwegian Water Resources and Energy Directorate and Enova. The Government has not determined how the measures described in Climate Cure 2030 should be followed up, and, therefore, the report is not an expression of Government policy.

The Government aims to present a report in the course of this year to show how Norway can meet its international obligations on reducing emissions by 50 per cent and up to 55 per cent. The report will describe the collaboration with the EU and how we can meet the ambition of a 45 per cent reduction in sectors not subject to the EU ETS.

Climate Cure 2030 forms an important part of the basis for this plan. Climate Cure has looked at the possibility of using CCS for emissions from sectors not subject to the EU ETS and assesses measures at three waste incineration facilities. The costs of the measures are estimated to be in the middle of three cost categories for measures, in the range of NOK 500–1,500 per tonne of CO2e.

Source Climate Cure 2030 [21]

2.3.3 The Sustainable Development Goals

In 2015, UN member states adopted the 2030 Agenda for Sustainable Development. This comprises 17 Sustainable Development Goals and 169 targets related to the economic, social and environmental aspects of sustainability.

The Sustainable Development Goals apply to all countries and all segments of society. They emphasise cooperation, partnership and how the goals are interconnected. The goals are universal, which means that Norway has the same responsibility as all other countries to contribute to achieving the goals by 2030. The Government has decided that the Sustainable Development Goals will constitute the main course of policy for addressing the biggest challenges of our time, including in Norway.

Goal 13 on Climate Action is to take urgent action to combat climate change and its impacts. It will be particularly challenging to reduce global greenhouse gas emissions in line with the climate targets at the lowest possible cost without using CCS.Investment in CCS will therefore contribute to achieving Goal 13.

CCS can also contribute to achieving Goal 7 on Affordable and Clean Energy in that CO2 can be captured and stored in conjunction with electricity production from coal and gas, and in hydrogen production from natural gas, known as blue hydrogen. Large-scale CCS will require new technical solutions, significant infrastructure development, and will create new jobs. This will contribute to achieving Goal 9 on Industry, Innovation and Infrastructure.

If the development of CCS is to contribute to economic growth in a long-term perspective, successful large-scale CCS must develop at the global level to become profitable, seen in relation to existing and alternative energy solutions. This is an important prerequisite for CCS to contribute to achieving more Sustainable Development Goals, including Goal 8 on Decent Work and Economic Growth.

2.4 Status of the global development of CCS

According to the Global CCS Institute3 (GCCSI), 58 projects for large-scale CCS have currently been given the go-ahead worldwide. The projects are in different phases of development. The estimated capture capacity of all the projects combined is around 127 million tonnes of CO2 per year.

Twenty of the projects are already in operation, with an overall capture capacity of just under 40 million tonnes of CO2 per year. Of these, 13 are in North America, while five are distributed between Asia, Australia and South America. With its two CO2 storage projects on Sleipner and Snøhvit, Norway is the only country in Europe with projects in the operational phase. At the global level, CO2 has been stored on land and under the seabed, and been used to enhance oil recovery and as an input factor in industrial processes. See Figure 2.5 for a global overview of CCS facilities.

Textbox 2.4 How does Longship contribute to innovation?

Longship stands apart from most other CCS projects currently in operation in Norway and internationally. The project will contribute to learning and greater efficiency, resulting in lower costs for subsequent projects. The following elements are innovative:

  • Demonstration of a full, but flexible, value chain with carbon capture from cement production and potentially from waste management and shipping, and CO2 storage beneath the seabed.

  • The use of European and Norwegian regulations in projects involving a whole chain of different stakeholders. The project demonstrates, among other things, the use of the EU ETS and the EU Directive on CO2 Storage.

  • A flexible transport and storage solution that will have the capacity to receive CO2 from many sources.

  • A commercial framework that provides incentives for further development of CCS in Europe.

Two new CCS projects have become operational in the past year: Gorgon in Australia in 2019 and Alberta Carbon Trunk Line in Canada in June 2020.

Gorgon uses CCS at a gas processing facility and will capture and store four million tonnes of CO2 per year. This project is similar to Norway’s Snøhvit project, and is solely for climate purposes.

The initial phase of the Alberta Carbon Trunk Line project will transport around 1.6 million tonnes of CO2 from a mineral fertiliser plant and a refinery that produces hydrogen. The CO2 has been used to enhance oil recovery. The pipeline has the capacity to transport 14.6 million tonnes of CO2 per year, and Canada assumes that new carbon capture projects will utilise this infrastructure over time.

In July 2020, it was announced that Petra Nova in the USA, which has been operational since 2017, had halted operation of its carbon capture project installed on coal-fired power because it was no longer considered profitable. CO2 captured from coal-fired power plants was sold for the purpose of enhancing oil recovery, and the low oil price meant that the project was no longer profitable.

According to GCCSI, three new projects are currently under construction. Two are in China, both related to the chemical industry, and one related to power production is in the USA.

A further ten projects, including Norway’s project, are in what is known as the advanced development phase. Three of these are in the power sector, while the remaining seven are in industry. The project in Norway is the only project to consider CCS from waste incineration and cement production.

There are also a number of demonstration facilities for CCS in operation, and carbon capture technology has been tested at different test centres. The Technology Centre at Mongstad is one of the biggest CO2 test facilities in the world.

Figure 2.5 Global overview of CCS facilities in 2019 from the Global CCS Institute. The figure shows large-scale facilities, smaller pilots and test facilities. Large-scale facilities are defined as those that capture more than 400,000 tonnes of CO2 per year. T...

Figure 2.5 Global overview of CCS facilities in 2019 from the Global CCS Institute. The figure shows large-scale facilities, smaller pilots and test facilities. Large-scale facilities are defined as those that capture more than 400,000 tonnes of CO2 per year. The figure shows projects under planning, construction and operation, as well as discontinued projects.

Source Global CCS Institute, The Global Status of CCS. 2019 [22].

According to the World Bank, around 22.3 per cent of global emissions are currently covered by carbon emissions pricing [23]. The cost of emitting CO2 is the most important economic driver for implementing CCS projects. Higher CO2 emission prices and greater scope will facilitate the development of more CCS projects worldwide. Although CO2 emissions pricing is important to ensure investments in CCS facilities, political support will also be imperative. Targeted measures will be necessary to increase early investments and reduce costs [24].

2.5 CCS in Europe

2.5.1 Status

A number of countries, including the EU, have committed to a net-zero target or to be emission-neutral by 2050. The EU’s green growth strategy ‘the European Green Deal’, provides a more ambitious European climate policy both leading up to 2030 and 2050. The European Commission has defined CCS as one of seven strategic building blocks to achieve its target. CCS is therefore included in the Commission’s climate policy instruments.

Although it is preferable to avoid emitting greenhouse gases at the source, the EU recognises that it will be necessary to remove greenhouse gases in order to compensate, among other things, for emissions from sectors in which it is difficult to cut emissions all together. Emissions can be compensated for by increasing the natural absorption of CO2 in agriculture, forestry and other land use, and by capturing and storing CO2 in geological reservoirs.

Along with the Netherlands and the UK, Norway is at the forefront of European CCS efforts. GCCSI’s overview shows that there are eleven full-scale CCS projects of various degrees of maturity under development in Europe, all of which are located in Norway, the Netherlands or the UK. Of these, Norway’s Longship and the Dutch project Porthos in Rotterdam are the most advanced projects under development.

Taking a slightly longer perspective, an analysis by Thema and Carbon Limits [25] identified 41 potential projects in Europe. Of these, 35 are additions to the projects included in GCCSI’s overview and some of them have started to develop new projects based on the possibility of utilising Northern Lights’ storage facility. In recent years, CCS has also received more attention in a number of EU countries that are now looking to CCS as a potential measure for meeting the climate targets in their national climate and energy plans [26].

Northern Lights is one of very few projects that can develop more extensive infrastructure for CO2 storage in Europe. Figure 2.6 gives an overview of CCS projects that are EU Projects of Common Interest. Two similar projects are the Dutch Porthos and the British CO2 Sapling, both of which are located in the North Sea. CO2 sources from all over Europe will be able to connect to the storage infrastructure these projects develop. Many of the European projects only cover carbon capture and see the Northern Lights storage facility as a potential storage solution for their CO2.

Figure 2.6 Stakeholders affiliated to Northern Lights’ Project of Common Interest (PCI) for CCS

Figure 2.6 Stakeholders affiliated to Northern Lights’ Project of Common Interest (PCI) for CCS

Source Northern Lights

Textbox 2.5 The Porthos project

Porthos (Port of Rotterdam CO2 Transport Hub and Offshore Storage) is a project based in the Netherlands developed by the Rotterdam Port Authorities, EBN (Energie Beheer Nederland) and Gasunie, and will transport and store CO2 from industry in Rotterdam. CO2 will be captured from various activities and then transported to a joint pipeline that runs through Rotterdam’s port area. It will then be transported to a platform in the North Sea about 20 km from the coast. The CO2 will then be pumped from this platform into empty gas fields more than 3 km beneath the seabed. If an investment decision has been made for the project by the end of 2021, the system can be operational by 2024. The project’s capacity the first few years is expected to be around 2.5 million tonnes of CO2 per year. The Porthos project received EUR 1.2 million in funding from the Dutch authorities in 2018 and a grant of EUR 6.5 million from the European Commission in 2019.

Porthos and the Norwegian project are considered to be the most mature projects currently under development in Europe and are included on the EU list of Energy Projects of Common Interest.

Source porthosco2.nl

2.5.2 EU support schemes

The EU has several funding schemes that are applicable to CCS. The Innovation Fund’s first round of calls for proposals was issued in July 2020. The Innovation Fund is the EU’s most extensive funding scheme for innovative climate technology. The EU also has the Connecting Europe Facility (CEF) funding scheme for trans-European infrastructure projects.

Infrastructure projects of Common European Interest4 can apply for funding from CEF. Three CCS projects have been awarded funding under this scheme: Two in the UK (two sub-projects under Net Zero Teeside and The Acorn Project) and one in the Netherlands (Porthos). The EU Energy Projects of Common Interest list has five projects involving trans-European CO2 transport that are eligible to apply for funding under CEF.

The projects are located in the area in and around the North Sea and include Belgium, the Netherlands, Norway and the UK. One of these is Northern Lights, which can receive CO2 from industry players in a number of European countries. Equinor, together with several other potential European CO2 sources, has applied for funding from CEF for studies in connection with phase 2 of Northern Lights. The EU also provides funding for research projects through the EU Framework Programme for Research and Innovation Horizon 2020, and from 2021, its successor Horizon Europe.

In June 2020,5 the European Commission started the process of assessing potential incentives for nature-based solutions to CO2 removal. Nature-based solutions entail absorption by agriculture, forestry and other land use, and CCS on emissions from biogenic matter, also known as negative emissions.

Textbox 2.6 The EU Innovation Fund

The EU Innovation Fund is a European funding programme for demonstration of innovative low-emission technologies in the period 2021–2030. The fund aims to contribute to achieving Europe’s specified contribution under the Paris Agreement and the target of net-zero emissions in Europe by 2050. It will award funding to technology projects in renewable energy, energy-intensive industry, energy storage and CCS.

The fund is financed by the sale of 450 million allowances from the EU ETS. The size of the fund is dependent on the price of allowances. According to the European Commission’s estimates, the fund will amount to around EUR 10 billion in the period 2021–2030 if the price of carbon allowances is EUR 20 per tonne of CO2, while EUR 15 billion will be available with an allowance price of EUR 30 per tonne of CO2.

Support from the fund can cover up to 60 per cent of the additional costs associated with the use of innovative technology to prevent greenhouse gas emissions. The fund can support additional costs related to both investments and additional operating costs over a period of ten years. The funding is paid out when the project reaches the agreed milestones. Up to 40 per cent of the funding can be paid when the total funding for the project has been secured.

Funding from the Innovation Fund does not count as state aid. This means that projects that receive funding from the Innovation Fund can still be awarded state aid for other costs in accordance with the applicable state aid rules.

Norwegian projects can receive funding on the same terms as European projects. The fund’s first call for proposals was issued on 3 July 2020 with a deadline for applications of 29 October 2020. Enova is responsible for the administration of Norway’s participation in the Innovation Fund.

2.6 Norway’s conditions for investment in CCS

Norway has a strong technical CCS community. We have developed extensive expertise in the area over the past 25 years due in no small part to the experience gained from planning CCS projects in Norway. Furthermore, the Norwegian continental shelf is large with abundant possibilities for CO2 storage in geological formations beneath the seabed. For many years, various governments have supported technology development, testing and pilot projects, and emphasised CCS as an important climate mitigation tool in international climate negotiations.

The technical CCS community in Norway covers all aspects of activities. We have a strong research environment. Our research groups are active in international research communities and networks. The Norwegian CCS Research Centre (NCCS), a centre for environmentally-friendly energy in Trondheim6 is dedicated to the field of CCS. The research programme CLIMIT is an important source of funding for research and demonstration. Development and operation of Technology Centre Mongstad (TCM) has also provided substantial learning, and TCM has established itself as a leading international competence centre for demonstration of capture technology. The planning of full-scale projects at Kårstø and Mongstad has provided valuable learning both in the industry and administration, which has been useful to the project the Government is now presenting.

Through several research and development projects, and not least TCM, we have developed world-leading expertise in proper measurement, management and regulation of the use of different amines in carbon capture facilities. Norway now has a competent regulator and extensive expertise in setting emission limits for such facilities. This ensures that capture facilities that receive an emissions license will not pose an undesirable risk to health or the environment.

For decades, the development and operation of CCS projects on Sleipner and Snøhvit have demonstrated safe CO2 storage in geological formations beneath the seabed on the Norwegian continental shelf. Monitoring programmes and reservoir simulations have been developed that have proven that CO2 storage is safe, which will benefit new projects. Knowledge and experience from petroleum activities have been essential to the development of CCS in Norway. The strong technical environments in oil companies have been a prerequisite for developing these projects and the companies have further developed their expertise through them.

Our natural advantage in the form of having a large and well-explored continental shelf with good possibilities for CO2 storage is also a decisive factor. The Petroleum Directorate has documented a vast potential for storing CO2 beneath the seabed on the Norwegian continental shelf [2], which entails a possibility of storing large volumes of CO2 from the rest of Europe.

The EU Directive on CO2 storage has been implemented in relevant Norwegian legislation to establish the necessary framework. Based on the legal authority of this framework, Exploitation Licence 001 has been awarded to Equinor for the Northern Lights project.

The amount of CO2 emissions in Norway that is suitable for CCS is limited. International cooperation on CCS will be essential if Norway’s investment in CCS is to result in an emissions reduction that makes a difference.

The petroleum industry’s experience and expertise has been important to realise dedicated business models for CCS. A model has been developed on the basis of the Norwegian project, which provides a good premise for increasing the number of projects that want to connect to a storage facility in Norway.

In line with the Paris Agreement, the parties will strengthen cooperation on the development and transfer of climate technology. CCS is an example of a technology where Norway is in a good position to contribute to technology transfer. The value of this transfer will increase significantly if we can also share experience from our planning and implementation of the project underlying this white paper with other countries.

Footnotes

1.

For categorisation and methods, see https://www.npd.no/en/facts/publications/co2-atlases/co2-atlas-for-the-norwegian-continental-shelf/3-methodology/

2.

In addition to carbon dioxide (CO2), CO2 equivalents also include gases such as methane (CH4), nitrous oxide (N2O) and fluoride gases (HFCs, PFCs and SF6) converted into CO2 equivalents.

3.

https://www.globalccsinstitute.com/

4.

Projects of Common Interest (PCI).

5.

https://etendering.ted.europa.eu/cft/cft-display.html?cftId=6709

6.

https://www.sintef.no/projectweb/nccs/

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