North Sea Transition Authority hails 'huge net zero boost' as it awards first round of carbon storage licenses to a dozen firms

Twelve companies have been awarded 20 licenses to develop offshore carbon dioxide storage projects in UK waters, marking the country's first ever licensing round for carbon storage facilities.

Confirming the licenses this morning, the North Sea Transition Authority (NSTA) said the first carbon injection at an offshore site could now occur in within six years, as it hailed the announcement as a major boost for the UK's transition to a net zero emission economy.

The body said it had picked projects with a range of geological storage types through a selection process that considered sites' geology, proximity to existing infrastructure, and links to the net zero clusters that are planning to install carbon capture technology at a raft of industrial sites. The sites are spread in various locations acound the UK, including in waters near to Aberdeen, Lincolnshire, Liverpool, and Teesside.

The total square footage of the selected underground sites is larger than the county of Yorkshire, at around 12,000 square kilometres, according to the NSTA.

Stuart Payne, chief executive of the NSTA, said the sites had the potential to eventually store around 10 per cent of the UK's emissions.

"The UK's offshore waters remain the crown jewel of our energy mix, providing energy security, emissions reduction and carbon storage," he said. "This will require more and more integration and collaboration in a crowded space, and we are working closely with governments and agencies such as The Crown Estate and Crown Estate Scotland to ensure we maximise this amazing potential."

"We look forward to working with these licensees to make these projects a reality as soon as possible and to opening more carbon storage rounds in the near future - my thanks to our teams and industry for their great work, but this is just the beginning."

The names of the successful bidders will not be unveiled until they official accept the licenses. However, the volume of awards indicates a majority of the 26 original bids have been successful.

Italian oil and gas giant Eni and exploration and production companies EnQuest and Neptune Energy are among the firms to have publicly announced bids.

The government is aiming to store up to 30 million tonnes of carbon dioxide a year by 2030, or roughly 10 per cent of the UK's annual carbon emissions, up from virtually zero today.

In the March Budget, the Chancellor confirmed the government would spend £20bn on carbon capture schemes across the UK, as it launched the next phase of its industrial decarbonisation scheme.

Lord Callanan, Minister for Energy Efficiency and Green Finance, said the government's investment put the UK in a "prime position to take advantage of the geological goldmine beneath our shores to store CO2, and grow our economy by becoming world-leaders in this developing industry".

"These new licences, together with fresh powers granted to NSTA within the landmark Energy Bill, will develop our most comprehensive picture yet of UK's carbon capture and storage potential, strengthening our energy security and cutting emissions while creating thousands of skilled British jobs," he added.

In related news, Dumfries and Galloway firm Carbon Capture Scotland has announced it has secured a seven-figure sum from Steyn Group to scale its "specialist" biogenic carbon capture and utilisation technology.

The business has operated as Dry Ice Scotland since 2012, before rebranding the operation to Carbon Capture Scotland last year. It already operates one of the UK's largest dry ice manufacturing sites and now has ambitions to develop the "world's largest" carbon capture plant by 2024.

"This latest funding will be instrumental in enabling us to achieve our goal to be the global leader in carbon capture, which is a huge coup for Scotland," said company co-founder Richard Nimmons.

And in further industrial decarbonisation news, the government has today launched a consultation into how it can scale and drive competition within the electrolytic, or 'green', hydrogen industry.

The purpose of the call for evidence, which closes in August, is to gather evidence to understand more about the "market conditions needed for the UK to transition to price-based competitive allocation for electrolytic projects and potentially other specified non-CCUS (carbon capture, usage and storage) technologies", the government said.

It also explores the extent to which a price-based competitive allocation process could incentivise projects to support broader outcomes beyond cost reduction of low carbon hydrogen production, and "how price-based competitive allocation should be designed", it added.

The government said it expected the call to evidence to be of particular interest to developers of ‘green' hydrogen projects, firms looking to scale low-carbon hydrogen production that is not dependent on carbon capture and storage, businesses in the low carbon hydrogen production supply chains, electricity suppliers, and consumer and environmental groups and trade bodies.