CCS sector: viability and optimism at Northern Lights Summit 2023

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Northern Lights recent summit drew speakers (and competitors!) from throughout the CCS value chain to present and discuss progress and challenges. Much has been achieved, but more coordination is required as the CCS sector looks to scale up.

Northen Lights – the innovative, open source CO2 transport and storage infrastructure in Øygarden, Norway – boasts an eye-catching visitor centre, but even this modern building wasn’t large enough to accommodate all who wished to attend the company’s sixth summit. With every seat taken, several hundred visitors (including this editor) followed proceedings from the comfort of their homes and offices.

The summit was kick-started by Northern Lights’ Managing Director, Børre Jacobsen. Setting the scene, he indicated that as interest in CCS increased amongst politicians, the public at large and also numerous branches of industry, it was reassuring to see how so many companies were committed to making CCS a reality. “A year from now, I expect to see the first tanker carrying liquified carbon dioxide arrive at this harbour,” he stated.

Looking ahead, he said that the next challenge for the whole industry would be to increase the scale and availability of CO2 storage. “Despite the need to prevent global warming, society has made little progress in reducing carbon dioxide emissions. CCS is an effective tool to help combat climate change. So let’s all get to work and pick up the pace. I hope that today’s proceedings will inspire and motivate.”

Johanna Fiksdahl (Policy Officer DG ENER, European Commission) discussed the EU’s Carbon Management Strategy. Image courtesy: screen Story.

All-inclusive system

Following a message from State Secretary Andreas Bjelland Eriksen, Norwegian Ministry of Petroleum and Energy, the stage was handed to Johanna Fiksdahl (Policy Officer DG ENER, European Commission) who discussed the EU’s Carbon Management Strategy. On the subject of drivers, she first reviewed the existing framework and projects, touched on the role of the CCUS Forum, gave an update on the Net Zero Industry Act and finally highlighted two studies as regards transport and storage infrastructure.

Moving on to CO2 transport regulations, she discussed amongst others the need for open access, long-term planning and common standards to facilitate the flow of carbon dioxide throughout Europe. Highlighting pipeline routing and network evolution, she stressed the importance of an all-inclusive system. “It is important to consider the location of the emitters and also to take into account the needs of landlocked countries. They too must be facilitated in the European infrastructure for ICM. Another point for attention is storage capacity requirements beyond 2030. We need to look at the long term as there are bottlenecks to address.”

Mrs Fiksdahl said that when drawing up regulations, the Commission would avoid going into unnecessary details and instead build a framework that would facilitate the industry. And in reply to a direct question, she confirmed she had every confidence that a target of 50 Mt of CO2 storage per year within the EU was an achievable target.

Chicken-and-egg

The CCS Market Outlook was tackled next by Per Finstad (Project Manager, Rystad Energy). In a series of slides, he indicated that most interest in carbon capture is currently being led by North America and Europe, with particular activity noted amongst industrial companies and power generators. Digging deeper into the statistics, Mr Finstad highlighted that less than ten per cent of all global CO2 emissions originated in Europe and of that amount probably just ten per cent, or 250 Mtpa, were from hard-to-abate sources and hence of most relevance for CCS (reference year 2019).

So far so good, but his subsequent slide indicated a challenge ahead, namely the mismatch between the potential for CO2 capture on the one hand and existing plans for storage capacity on the other. So far, storage plans that have achieved FID status (Final Investment Decision) account for only 5% of the EU’s target of 50 Mtpa.

Mr Finstad was then the first presenter to refer to the ‘chicken-and-egg’ scenario. “CO2 capture projects need reliable storage solutions while storage projects want to secure long-term volumes to de-risk investments. This leads to a chicken-and-egg situation requiring font-runner projects supported by robust policy to mature the market.”

In a final slide, he touched on the number of CCUS alliances that have taken place since 2018 – over 600! Most can be described as collaborations, agreements or partnerships, but there are also a number of mergers and acquisitions in which existing oil majors figure prominently.

Asked about the commercial potential of the CCS industry, he replied that there were good opportunities for investments although probably not on the same scale as the oil and gas industry. He further voiced the opinion that the transport and storage of CO2 should ideally be developed based on the expertise acquired by existing ship owners and pipeline operators. This would maximise efficiency.

Gaining traction

The Summit then switched to a panel discussion. Moderated by journalist Ruth Astrid Saeter, participants were Jostein Tegle (Strategy & Market Director, Northern Lights), Kevin Meisel (Country Lead CCS, Wintershall Dea), Øystein Arvesen (VP Corporate Strategy & Sustainability, Aker BP) and Eduardo Famini Silva (Director Renewables and Energy Transition, RBC Capital Markets). Interesting detail: this panel included competitors who, in a refreshingly positive approach, sought common ground and shared objectives.

Given the free-flowing nature of the discussions it is impossible to recap all the topics and nuances that were discussed, but the following quotes will hopefully give a flavour of the positive tone.

“Good to see so much traction in CCS, which has developed from a research project to a concept within the International Energy Agency and is now fully in the public arena. We are all moving in the right direction so now we need to establish the market. The Northern Lights project has certainly catalysed momentum.”

“Two years ago, Northern Lights was the only licence holder for carbon dioxide storage on the Norwegian Continental Shelf. Now there are seven which I believe is a positive development. We need to further develop the ecosystem so that emitters can choose their preferred storage supplier.”

“Being a trailblazer is not an easy job. It requires working with authorities to develop the regulatory framework, then developing the business model and also factoring out how to share opportunities and risks.”

“CCS is attractive to investors. But there is always a ‘but’ and I do notice scepticism amongst some potential investors. The CCS industry therefore needs to become mainstream. Regulatory developments look positive. There are still substantial risks but investor interest is definitely present.”

“The oil and gas sector is a high-risk environment with the potential for high returns. Currently, the CCS industry is also a high-risk opportunity yet the returns are uncertain. Of course, the oil and gas industry produces a saleable commodity whilst CCS is in effect waste management. Innovation can help. De-risking via long term contracts would also deliver a boost.”

“Governments need to be the first movers. They are the orchestrator who can make the industry move together. A ‘stop-loss’ arrangement in the event of carbon prices falling below a set amount would be another incentive for investors.”

Lise Winther (SVP Upstream Projects and Technology, Yara Clean Ammonia) treated the audience to an emitter perspective. Image courtesy Screen Story.

Emitter perspective

The audience were then treated to an emitter perspective, courtesy of Lise Winther (SVP Upstream Projects and Technology, Yara Clean Ammonia).

By way of background, Mrs Winther explained that Yara’s facility in the Netherlands – which produces high-quality, nitrogen-based fertilisers – has been actively reducing emissions for decades. The development of superior catalysts has helped to drive down emissions by 45% since the early 1990s. Currently, a system fitted to the ammonia production plant is already capturing between 60 to 75% of carbon dioxide emissions. Much of that CO2 is delivered to the drinks industry as well as being used for the production of urea.

However, Yara is left with a surplus of CO2 and is therefore looking to finalize an agreement with Northern Lights. Mrs Winther said both sides were positive about the deal but she did lift the lid on challenges facing emitters. These included the need to discuss fine print in the contract details as well as addressing technical issues such as the CO2 composition, the facilities needed to transfer the CO2 to a tanker, etc.

When questioned, Mrs Winther confirmed that Yara was currently acting without public support, although some subsidies might be forthcoming from the Dutch Government. “People have asked why we wanted to be a first mover. Well, somebody’s got to do it. The nature of our business means Yara is a significant energy user and emitter of greenhouse gases. Hence we want to take our responsibility as regards climate change and hopefully motivate others to follow.”

Narrow gap to NZE

After a welcome lunch, Dr Mathilde Fajardy (Energy Analyst, International Energy Agency) discussed CCS as a net zero solution. She came with an honest message about society’s need to keep global warming to under 1.5 °C. Starting with positives, she noted that the sales of electric vehicles as well as solar and wind capacity additions were on an upward trend. Her next slide however reaffirmed the gap between operational CCUS capacity and the capacity that will be required to reach Net Zero levels by 2030.

Key message delivered by Mrs Fajardy is that the pathway to Net Zero has narrowed but that it is still reachable. CCUS plays a crucial part in achieving this goal, particularly in industrial decarbonisation, carbon removal, hydrogen, retrofits of existing power assets and synthetic fuel production.

To reach 2030 targets, she therefore urged the CCUS sector to work with policy makers to decrease project lead times, accelerate investment, develop CO2 storage resources and coordinate CCUS hubs development.

Discussing public-private cooperation were (left to right) Alexander Engh, Benna Hedegaard-Knudsen, Henrik Sulsbrück and Børre Jacobsen. Image courtesy Screen Story.

Toolbox

The afternoon’s panel discussion set out to discuss how public-private cooperation could accelerate CCS deployment. Taking the floor were Alexander Engh, (Deputy Director General, Norwegian Ministry of Petroleum and Energy), Benna Hedegaard-Knudsen (Bid Development Director, Ørsted), Henrik Sulsbrück (Head of Division, CCS, Danish Energy Agency) and Børre Jacobsen (Managing Director, Northern Lights).

For those unfamiliar with Scandinavia, it should be noted that a certain friendly rivalry exists between the various nations. That was clear from the good-natured banter amongst the panel members who – once more under Mrs Saeter’s expert moderation – quickly warmed to the theme. Again, the fast and open character of the discussions precludes a comprehensive report. However, the following comments are especially noteworthy:

“In Denmark, CCS is seen as part of the toolbox to reach greenhouse gas emissions reductions targets. And Danish politicians have moved quickly.”

“Norway’s Longship Project has had a real impact in Denmark. It furnished a huge learning opportunity and meant we could no longer hide behind excuses. It has also enabled the country to fast track our political ambitions to store carbon dioxide.”

“On shore CO2 storage is being reviewed in Denmark but draws a mixed response when trying to pinpoint possible locations.”

“We want our company to be a catalyst for change and have set up carbon capture at two biomass plants.”

“State support – including funding but also political backing and strategy – has been necessary but other funding sources also needed.”

“Northern Lights is a strong partner: they are a very professional company, have a wealth of relevant experience and benefit from the Norwegian government’s commitment via the Longship project.”

“On a broader scale, in Europe we cannot progress on a nation for nation basis. We need open and transparent European cooperation, so I urge countries not to ring fence subsidies, for example.”

“My vision is for a spot market for carbon dioxide in Europe. Longship has lifted the value chain but is not a scalable model. To promote a market-based solution we must reduce barriers and promote standardisation as regards carbon dioxide specifications which would facilitate cross-border business.”

“We’ve seen a huge momentum in the North Sea region and we can use that to scale up to a liquid market.”

“Sadly, it’s still cheaper to emit than to store. So we will continue to do everything we can to reduce the price of storage. Funding will still be needed for the time being but the snowball is starting to roll.”

“We need to develop the CCS ecosystem so I am encouraged to see steel going into the ground.”

The road to 2030

The summit then moved to a new topic, namely whether CCS in Europe is on track for 2030. To this end, four speakers from the ‘upstream’ side of the industry were tasked with presenting rapid-fire updates.

Firstly, Floris Mackor (VP Strategy CCS and Ammonia, Air Liquide), gave guidance on how CO2 sequestration could be successfully driven in the long run. He first stressed the need European and National Institutions to rapidly increase bilateral agreements as well as raise public awareness of the role of CCS. In turn, the industry should build effective partnerships and accelerate actions to deliver on project announcements.

He was followed by Leander Hanegreefs (Project Manager nextgrid, Fluxys) who showed how CO2 exit options are maturing in Belgium. He too issued a call for action, indicating the need for unification as regards CO2 specifications throughout the value chain, regulatory clarity within different member states, and bringing projects to FID to launch the CCS market.

The next speaker, Helen Miley (Project Execution Director, Porthos), drew one of the biggest rounds of applause when mentioning the very recent FID for the first major CO2 transport and storage system in the Netherlands. Giving details of the Porthos project, she said the scope was for 37 Mtpa for 15 years, with additional capacity built into the infrastructure for future development.

Annemarie Manger (Head of Joint Team, Aramis) finally overviewed a project to store CO2 in depleted gas fields offshore of The Netherlands. After discussing project milestones such as the FEED award in Q4 2023 she indicated the need to be aware of external contexts. In this regard she mentioned the Dutch General Elections set for November 22nd as well as the need to consider EC, German and French carbon management strategies.

Teamwork

The summit’s final speaker, Sverre Overå (Project Director Northern Lights Project, Equinor) then gave an update on the Northern Lights project itself. He was clearly proud of the results booked so far which, he noted with absolute sincerity, were thanks to the hard work and dedication of the whole team.

As regards onshore facilities, he overviewed technical assets such as the import jetty, the storage tanks, the injection pumps and the pipeline tunnel, plus ancillary units such as the workshop, substation and admin/visitor centre. Also interesting was an area as yet devoid of any construction work which, he indicated, was earmarked for future expansion. Providing specifics, he noted that onshore construction was progressing according to plan with 94% complete at the time of writing.

Mr Overå than turned his attention to the hidden aspects of the project, namely the pipeline and other subsea infrastructure. Again, work is proceeding according to plan, with 77% complete. Finally, he reviewed the status of drilling activity and wells, which he indicated were 95% complete. “The Northern Lights project will be finished and operational in 2024,” he concluded to a warm round of applause.

Making CCS viable

Bringing the summit to a close, Northern Lights’ Børre Jacobsen came to the stage for a final time. Thanking the speakers, panellists, attending guests, online viewers and event organizers, he exhorted the audience to further develop the CCS industry.

“Our goal today at this summit was to make CCS visible. I am confident we have achieved that. It is extremely energizing to see the progress being made by other CCS stakeholders, be they partners or competitors. Today’s event has convinced me more than ever that we all have a deep-rooted sense of responsibility and social awareness. Much still has to fall into place, but we can surely be inspired by the speakers we have heard today. So let us do all we can to develop CCS but always paying proper regard to safety. I am optimistic and I know I am not alone. Of course there will continue to be many challenges. But I for one am absolutely confident that by working together we can find solutions and make CCS viable.”

Disclaimer: For space reasons, some quotes have been abridged. The editor nevertheless believes this to be a faithful snapshot of the topics under discussion. All feedback welcome.

David Sear
David Sear
David has been writing about technology and trends in industry for the past twenty-five years. Never happier than when Interviewing people who work with valves, pumps, stainless steels, heat exchangers, electrolysers, etc, his goal is to present useful insights and applicable information in an easy-to-read format.

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All images were taken before the COVID-19 pandemic, or in compliance with social distancing.