On May 15th, Northern Lights JV and Ørsted announced the signing of a CO2 Transport and Services Agreement (TSA) to store 430,000 tonnes biogenic CO2 emissions per year from two power plants in Denmark. This agreement represents a major milestone for Northern Lights JV and is an essential step for creating a commercial market for CCS in Europe.
“We are very pleased that Ørsted has selected Northern Lights as CO2 tranport and storage provider. Ørsted is our second commercial customer who, together with Yara, gives us the opportunity to further utilise the capacity at our storage site below the North Sea. This agreement confirms the commercial potential for CCS and demonstrates that the market for transport and storage of CO2 is evolving rapidly”, says Børre Jacobsen, Managing Director of Northern Lights.
Today, Ørsted was awarded public funding from the Danish Energy Agency under the first Danish tender of the CCUS Fund to develop a CO2 capture hub for the biomass power stations Asnæs and Avedøre. The facilities will capture and liquefy 430,000 tonnes of biogenic CO2 per year. Northern Lights will transport the liquefied CO2 by ship for permanent offshore storage below the North Sea.
“We are very pleased with the outcome of the tender process, and we look forward to initiating the work of establishing carbon capture units at two of our CHP plants running on sustainable straw and wood chips. According to the UN’s panel on climate change, IPCC, capture and storage of biogenic carbon is one of the tools we must use to fight climate change, and our CCS project will contribute significantly to realising the politically decided Danish climate target for 2025 and 2030,” says Ole Thomsen, Senior Vice President, and head of Ørsted’s CHP business.
Carbon capture and storage is one of the four credible pathways to net zero as outlined by the International Energy Agency. In IEA’s net zero scenario, bio-CCS plays an important part in not only reducing but removing CO2 emissions. Because biomass absorbs CO2 from the atmosphere, capture and storage of biogenic CO2 results in net removal of CO2.
“From 2026 Northern Lights will be shipping the first cargo of biogenic CO2 from Denmark to Norway, which shows that CCS is a realistic tool that contributes to reach the global climate targets. Together with the Yara announcement, the agreement with Ørsted supports Northern Lights’ ambition on commercial growth and expansion, and establishing a European market for CCS”, Børre Jacobsen concludes.
The tender procedure is fully completed when the contract has been signed by Ørsted and the DEA. Signing is expected to take place shortly after expiry of the mandatory standstill period.
Facts about the agreement
- Northern Lights will transport 430,000 tonnes biogenic CO2 annually from the Ørsted Kalundborg Hub in Denmark to a CO2 receiving terminal at Øygarden, Norway.
- Biogenic CO2 refers to the emissions from bioenergy production, generated by the release of absorbed CO2 from biomass such as wood or organic waste.
- The liquefied biogenic CO2 will be stored intermediately in onshore tanks at Øygarden prior to the injection into the offshore reservoir via pipeline for permanent and safe storage, 2,600 meters below the seabed.
- The agreement is effective from 1 January 2026 and Northern Lights will be storing 430,000 tonnes CO2 annually for 10 years.