Nestled between seven countries and connected to the Atlantic Ocean, the North Sea has long been crucial to European development with diverse fishing grounds, key shipping routes and generous oil and gas reserves.
Now, it may also become a major hub for storing carbon dioxide.
The North Sea is emerging as the hot spot for carbon storage development in Europe, with countries keen to position themselves as frontrunners in what could become a lucrative business over the coming years.
Carbon capture and storage (CCS) technologies involve capturing CO2 emitted into the air and burying it underground, in this case in either depleted oil and gas fields or saline aquifers (salty water reservoirs under the seabed).
The European Commission, the executive arm of the European Union, proposed in mid-March what’s considered to be the world’s first underground carbon storage goal. The goal—to enable the storage of 50 million tonnes (Mt) of carbon dioxide annually by 2030—is expected to strengthen the need for more cross-border capture and storage deals.
CCS remains expensive and is technologically tricky, but scientists nonetheless consider it important in helping the whole world, including Europe, meet net-zero climate targets, especially when it comes to decarbonizing heavy industry sectors, like steel and cement production.
“What we are hearing from the market is that people are really screaming for storage,” said Lina Strandvåg Nagell, senior manager for projects and EU policy at the Oslo-based non-profit Bellona.
But to get it right, experts say, Europe needs to work together to overcome a chicken-and-egg dilemma that has been stalling progress.
“To have an environment where you are comfortable investing in capture, you need … to know that [the CO2] can be stored and you need to know that it can be transported there,” Nagell said. “In the same way, if you’re going to develop storage, you need to know that it will actually be captured.”
It’s a dilemma countries and companies are in the early stages of tackling through a mix of cross-border projects and deals meant to capture investors’ confidence.
Norway has been successfully storing carbon emitted from one of its offshore gas fields for almost 30 years.
The Scandinavian country, which is not a member of the EU, has been leading CCS efforts, keen to tap into its offshore oil and gas expertise to develop CO2 storage sites under the North Sea—and make a successful business out of it.
Northern Lights, a joint venture project by energy companies Equinor, TotalEnergies and Shell, is set to inject up to 1.5 Mt of CO2 per year into a saline aquifer next to one of Norway’s main gas fields starting in mid-2024.
Global ammonia producer Yara and Northern Lights signed the world’s first commercial cross-border agreement on CO2 transport and storage last summer that will allow the company to ship and store captured CO2 from its plant in the Netherlands off the Norwegian coast beginning in 2025.
Norway’s Equinor was given the green light last year to develop two more CO2 storage sites in the North Sea, describing them as “important building blocks for developing the Norwegian continental shelf into a leading province for CO2 storage in Europe.”
Denmark, whose western coast hugs the North Sea, is also ramping up its CCS efforts.
The country inaugurated in March the world’s first active cross-border storage site, Project Greensand, by injecting CO2 captured in Belgium into a depleted North Sea oil field as part of a pilot project. A final investment decision for a full-scale project is planned for the first half of 2024. The expected storage capacity could be 8 Mt of CO2 per year by 2030.
Denmark estimates it can store between 12 and 22 billion tonnes of CO2 underground.
“That is many hundred times our annual emissions and aligns with the political ambition for Denmark to become a European hub for storing CO2,” a spokesperson for the Danish Ministry of Climate, Energy and Utilities, told Cipher.
In the Netherlands, the Aramis project, a public-private partnership that includes Shell and TotalEnergies, is looking to store CO2 captured from industrial actors in depleted gas fields roughly 2 to 2.5 miles (3 to 4 kilometres) below the seabed.
The goal is to also store CO2 from other European nations, said Joep Sweyen, public affairs lead for the Aramis project on behalf of the state-owned gas company EBN.
Not all countries can or want to look at CO2 storage on their territory—but they will need to store captured CO2 somewhere.
Germany, Europe’s largest industrial emitter, is planning to capture 4.1 Mt of CO2 by 2030, France 6.4 Mt and Belgium 2.2 Mt, according to the International Energy Agency.
These are small percentages of each countries’ total emissions, but the reductions will be key for decarbonizing their heavy industries. For context, the Commission’s proposed 50 Mt of CO2 storage target represents 1.4% of the EU’s 2021 greenhouse gas emissions.
Efforts to capture domestic emissions are spurring the business case for CO2 storage, said Eadbhard Pernot, policy manager for carbon capture at the Clean Air Task Force, a Boston-based climate advocacy group with offices in Europe.
“We will need CCS for our own climate goals and our own industries,” said Pernot. “But we can also try and develop a business around CO2 storage for other countries in Europe which may have political barriers or also geological or economic barriers to developing CO2 storage for themselves.”
Having a diverse set of CO2 storage options like the ones taking shape in the North Sea will be key in the coming years, Pernot said.
Policymakers “didn’t want to rely on Norway to be the sort of storage operator of Europe,” he said. “What’s really important is that we don’t allow monopolies to develop.”
The British government also announced last month it will commit $24 billion in funding for CCS over the next 20 years, part of the country’s longer commitment to scale up the technology. The United Kingdom is no longer part of the EU.
In the United States, the potential use of CCS to decarbonize heavy industry is also gaining ground since the passage of the Inflation Reduction Act, although the country has less expertise in offshore CO2 storage compared to Europe, said Pernot.
Annual demand for CO2 storage services in the EU and neighbouring countries like Norway could grow from 80 Mt of CO2 in 2030 to at least 300 Mt of CO2 in 2040.
For CCS to be successful, project developers must coordinate their work along the capture, transport and storage parts of the chain.
“Although these projects are separate projects with various partners, they need to give each other enough comfort that the other element of the chain will be ready in time,” said Sweyen of the Dutch gas company EBN.
The EU is expected to share its wider vision about the role CCS can play in decarbonizing its economy, with the Commission set to release a guiding document by the end of the year.