First Ever UK Carbon Storage Licensing Round Launched

First Ever UK Carbon Storage Licensing Round Launched
It is expected that any new licenses will be awarded in early 2023.

The North Sea Transition Authority (NSTA) has launched the UK’s first ever carbon storage licensing round.

As part of the round, 13 areas are being offered for licensing off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire in the Southern North Sea, Central North Sea, Northern North Sea, and East Irish Sea, the NSTA outlined in a statement sent to Rigzone. The new areas are made up of a mixture of saline aquifers and depleted oil and gas field storage opportunities, the organization highlighted.

The application window for the new areas is open for 90 days, closing on September 13, and will be evaluated by the NSTA on technical and financial criteria. It is expected that any new licenses will be awarded in early 2023. The size and scale of the licensed stores mean that they are likely to proceed at different paces, but first injection of CO2 could come as early as four to six years after the license award, the NSTA noted.

The NSTA said it launched the carbon storage licensing round in response to unprecedented levels of interest from companies eager to enter the market. The level of interest already expressed suggests there will be strong competition meaning that prospective licensees will need to produce high-quality bids to win licenses, according to the NSTA.

Alongside six licenses which have been issued previously, the new areas could have the ability to make a significant contribution towards the aim of storing 20-30 million tons of carbon dioxide by 2030, the NSTA pointed out, adding that the round is envisaged to be the first of many.

“This is an important day on the path to net zero emissions,” Andy Samuel, the NSTA Chief Executive, said in an organization statement.

“In addition to the huge environmental benefits of significantly reducing carbon dioxide emissions into the atmosphere, the facilities will provide opportunities for many thousands of highly-skilled jobs,” he added in the statement.    

“Carbon storage is going to be needed across the world. There is growing investor appetite and we are keen to accelerate development of the carbon storage sector so that UK is well-positioned to be a global leader … The NSTA is ready to work with industry, government, regulators and others to deliver these exciting projects at pace,” Samuel went on to say.

UK Energy and Climate Change Minister Greg Hands said, “we’re determined to make the UK a world leader in carbon capture, which will be crucial in helping us reduce emissions and protect the viability and competitiveness of British industry”.

“This licensing round is an important step in making this a reality, helping support new jobs across the UK and encouraging investment in our industrial heartlands,” Hands added.

Last month, the NSTA revealed in an organization statement that it had awarded two carbon storage licenses in the Southern North Sea to BP and Equinor. In the statement, the NSTA highlighted that it had awarded five licenses since 2018 and agreed the transfer of a sixth.

In April, the NSTA announced renewed collaboration with the Crown Estate and Crown Estate Scotland “to unlock the potential of carbon storage”. In an organization statement at the time, the NSTA outlined that the three organizations were reiterating their continued commitment to work in close collaboration to help meet the UK Government’s carbon storage targets of 20-30 million tons of CO2 emissions per year by 2030, and over 50 million tons by 2035. 

Back in March, the Oil and Gas Authority changed its name to the NSTA to reflect its evolving role in the energy transition. In a company statement at the time, the NSTA said its new name embraces its expanding role in the energy transition, including as the carbon storage license and permitting authority.

To contact the author, email andreas.exarheas@rigzone.com


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