UK Completes First Round of Licenses for Offshore Carbon Storage

offshore carbon capture UK — The coastline near Baxton in Southeast England is targeted to become the country's first energy hub (UK Oil & Gas Authority)

The UK took a major forward toward its ambition of being a leader in carbon storage. They completed the awarding of licenses in the UK’s first-ever carbon storage licensing and it includes leaders in the energy industry including Shell, BP, Eni, Esso, and Wintershall Dea as participants.

A total of 21 licenses were awarded and shared by 14 companies. Collectively it represents the opportunity to store almost 10 percent of total UK greenhouse gas emissions. The UK’s annual CO2 emissions were calculated to be 341.5 million tonnes in 2021.

Stuart Payne Chief Executive of the North Sea Transition Authority (NSTA) which is overseeing these initiatives notes that carbon storage will play a crucial role in the energy transition. The goal is to store carbon dioxide deep under the seabed and at the same time, they expect the program will play a key role in hydrogen production and the creation of energy hubs in the UK.

The first-round initiative awarded the 21 licenses in depleted oil and gas reservoirs and saline aquifers which are over 4,600 square miles. The authority estimates that these locations could store up to 30 million tonnes of CO2 per year by 2030. The UK Government’s ambitious carbon storage targets of 20 to 30 million tonnes of CO2 emissions per year by 2030, and over 50 million tonnes by 2035, would make a significant contribution to net zero.

“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,” said Lord Callanan, Minister for Energy Efficiency and Green Finance. “These new licenses confirmed today will be vital to realizing our CCUS potential, playing a key role in the energy transition.”

One of the elements of the UK’s strategy is to also develop so-called energy hubs around the country. One of the first they envision is 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. Located in the Southeast UK near Norwich, Bacton is located on the coast. During this licensing round, Shell, Perenco, and ENI were all been awarded licenses off the coast of Norfolk in sites that could form part of the country’s first energy hub. Other locations in the carbon capture licensing included sites off the coasts of Aberdeen, Teesside, and Liverpool.

Six licenses 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.

It is estimated that as many as 100 storage licenses 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. NSTA will assess the response and the quality of opportunities in locations across the UK before deciding when to run a second round.