First official UK carbon storage application round closes

First official UK carbon storage application round closes

26/01/23

To date, only six CO₂ storage sites in the UK have had licences granted, however none of them are currently being used for storage. Given the exponential growth in the number of companies looking to enter the CCS sector, storage is becoming increasingly important, and this heightened demand has triggered growing momentum to not only use existing sites, but also create additional new areas. As a result, the UK's carbon storage governing body, North Sea Transition Authority (NSTA), moved away from their usual approach of issuing licenses ad hoc and instead took the decision to issue an official application round. The NSTA put forward 13 additional storage locations, anticipating strong interest for new applications - and it was not disappointed.

With this - the first official UK carbon storage application round - having closed on 13 September 2022, we look at what we can expect to happen next...

How many applications were received?

There were 26 bids in total. While this suggests there were two bids for each location, there have not been any official reports on how the bids were distributed. What we do know is that 19 companies participated, with some making applications for more than one location.

What happens now?

The NSTA is currently reviewing the applications and providing clarification to applicants.

Where are these new storage locations?

They are all located off the coast of one of the following four areas: Aberdeen, Teesside, Liverpool, and Lincolnshire.

When will awards be made?

We believe that the licenses will be granted during Q1-23. However, it is important to remember that all successful applicants will also need to obtain a lease from The Crown Estate or The Crown Estate Scotland (as required) before they can proceed.

What storage capacity do these new areas represent?

The NSTA believes these areas could provide up to 30million tonnes per year of additional carbon storage by 2030.

How are the areas selected?

We understand the decision will look at a variety of factors, with the primary considerations being:

• Proximity to industrial hubs
• Geological suitability
• Existing infrastructure.

In addition to this, the NSTA will also consider the impact each proposal would have on issues such as fishing, offshore wind farms and environmental sensitivities.

When will storage begin?

This will depend upon numerous factors, so it is hard to give exact dates at present, but we expect these sites to be fully operational within four to six years of their license being awarded.

Will we see more license application rounds?

The NSTA has previously said that up to 100 locations will be required if the UK is to meet its net zero targets by 2050. As such, we believe that yes, it is likely that NSTA will issue new rounds of applications every year.

Clarksons' specialist experience within liquid CO₂transportation

The Clarksons Gases team is firmly established at the heart of the global gas markets with an unrivalled track record in providing shipping and trade-related services for LPG, ammonia, petrochemical gases, and LNG. We are determined to become equally proficient in the emerging, seaborne CO₂ business and have formed a specialist team within Gases department.

The specialist team continues to work closely with other divisions within Clarksons to ensure we remain at the forefront of developments in the sector. Our knowledge base on CO₂ has increased significantly and we are confident of being able to assist you with your CO₂ projects and shipping strategy.

Contact the liquid CO₂ transportation team.

Further Insight