Norway Clears Funds for $2.9bn CCS Plan

Norway's parliament has approved funding for the Longship carbon capture and storage (CCS) scheme, which the government has described as the country's biggest ever climate project.

The Norwegian energy ministry said on December 15 that parliament had adopted its budget for 2021, which includes funding for Longship. The ministry has also been given authority to enter agreements with Equinor and the other developers of the transport and storage part of the project, Northern Lights. 

Parliament will debate Longship in early 2021, and a plan for its development will be formally approved once lawmakers have adopted the project's white paper, the ministry said.

"Longship is the largest climate project in the Norwegian industry and will contribute substantially to the development of CCS as an efficient mitigation measure," Norwegian energy minister Tina Bru said in a statement. "Working together with the industry, the step-by-step approach has confirmed that the project is feasible."

Longship will initially involve the capture of CO₂ from a cement factory in Brevik and a waste incineration plant in Oslo. Under Northern Lights, which besides Equinor also involves Shell and Total, the captured CO₂ will be delivered via tankers to a reception plant north-west of Bergen and then piped offshore to an aquifer some 3 km under the seabed.

Longship's overall cost is projected at kroner 25.1bn ($2.9bn), including 17.1bn in investment and 8bn in operating costs over ten years. The Norwegian state is expected to cover kroner 16.8bn of the expenses.

"Northern Lights is a true pioneering project and the first of its kind offering a solution to cut emissions from industrial sources in Norway and Europe," Equinor CEO Anders Opedal commented. "We are ready to start realising this project that will be an important part of the climate solution."

Northern Lights will be able to store up to 1.5mn metric tons/year of CO₂ from 2024 under its first stage, of which the cement and incineration plants will supply 0.8mn mt/yr. The second stage calls for an expansion in storage capacity to 5mn mt/yr, making the project a CCS option for industry in a number of European countries. Equinor has said before that its aspiration is to transport and store CO₂ at a cost of between €30-55/ mt by 2030. 

The Northern Lights partners took a provisional investment decision in May and are now setting up a joint venture to oversee the project. 

Norway's energy ministry added that Longship would help pave the way for the production of blue hydrogen from natural gas using CCS. "This results in hydrogen with very low emissions and a major potential for value creation in Norway and for greenhouse gas emissions cuts in Europe," the ministry said.