Grants for CCS FEED-studies at Fortum Oslo Varme waste incineration plant

The Ministry of Petroleum and Energy will offer Fortum Oslo Varme grants for FEED-studies of CO2 capture at their waste incineration plant at Klemetsrud in Oslo. The Government has previously granted Norcem funding for FEED-studies of CO2 capture at their cement plant in Brevik.

- CO2 capture and storage can play an important role in the efforts to reduce global greenhouse gas emissions in line with the climate goals. I'm very pleased with the improvements made in the CO2 capture project Fortum Oslo Varme has presented, and that we now can continue FEED-studies at two capture sites. A reasonable cost level is decisive in order for a demonstration project to succeed. Moving forward with two capturing projects ensures competition between the actors, which will contribute to keeping the costs low, says Minister of Petroleum and Energy, Mr. Terje Søviknes.

The new external quality assessment concludes that the Fortum Oslo Varmes project has significantly improved since the last assessment. Cost estimates and uncertainties tied to the implementation of the project are reduced. Total cost for capture, transport and storage over a five year-period is reduced from 13,1 billion NOK to 11,8 billion NOK.

The Government places great emphasis on the cost level in this project. When FEED-studies are completed, another external quality assessment of the project will be carried out before the Government decides whether to realise the project. A decision to contribute to financing investment in and operation of a Norwegian full-chain CCS project has to be weighed against other climate measures. The Government has to choose effective measures that maximize the mitigation effect in a cost efficient manner.

The external quality assurer considers the demonstration project to be economically unviable as it is today. In order to make the project economically viable it must demonstrate sufficiently low costs and show that other projects will follow and profit from lessons learned through the Norwegian demonstration project.


Background

The Norwegian Government wants to contribute to a cost effective technology for CO2 capture, transport and storage. The Government's ambition is to realize a cost effective solution for CCS in Norway, provided this results in technology development internationally. In May, the Government presented status in the Norwegian demonstration project for capture, transport and storage of CO2 (see press release).

Amongst the three sites where CO2 -capture has been studied, Norcems project for CO2 capture at their cement plant in Brevik was considered as the best alternative. Due to new information provided by Fortum Oslo Varme, the Government announced a new external quality assessment process before deciding on whether to go forward with Fortum's project as well. The Government did not propose further funding of Yaras CO2 capture project at their ammonia plant in Porsgrunn.

Read the full report here (in Norwegian)