The Danish Energy Agency on Friday just four days before the second round of tendering for licenses for offshore carbon capture and storage was due to start that it would be postponing the process. Denmark is at the forefront of the development of the new industry but the government agency said it was postponing further license tenders until political issues can be resolved.
Denmark is moving forward to develop both the onshore and offshore elements of carbon capture and storage having awarded the first licenses in 2022. Initial efforts began in 2018 to develop the offshore storage component which seeks to inject CO2 below the seabed into depleted oil and gas wells and a 2022 agreement cleared the way for the awarding of the first licenses. The process called for annual tenders to start on August 15 with October 1 as the deadline for applications,
In the announcement, they noted that the terms set in 2022 called for “the parties of the agreement were to decide, whether the state participation share of future licenses should be set higher after the first tender round in the North Sea. As a result, the second tender round of offshore licenses is postponed, until this matter has been settled.”
The Danish Energy Agency hopes to be able to proceed with the next round of licensing later in 2023. They awarded the first three licenses for locations in the North Sea Wintershall Dea, INEOS Energy, and TotalEnergies. Under the terms of the original license tender, the Danish government through its Nordsøfonden agency received a 20 percent interest in each of the three projects.
INEOS is the most advanced of the efforts as it was already working under a provision demonstration license. The company began in 2022 setting up a demonstration to capture CO2 onshore, truck it to a port and transfer it by ship to the demonstration site. In March 2023, they completed what was billed as the first test of the technology injecting CO2. INEOS in partnership with Wintershall expects to start the first commercial operations for the Greensand project by 2025 injecting up to 1.5 million tonnes of CO2 annually and expanding to 8 million tonnes per year by 2030.
TotalEnergies in its successful tender proposed the Bifrost project. They are calling for injecting up to 3 million tonnes into a depleted oil and gas field starting in 2027. Their goal is to expand to 5 million tonnes by 2030.
In addition, in late 2022 it gave rights to Energinet, the Danish national transmission system operator for electricity and natural gas, to proceed with the investigation of sites to the east of Denmark that could be used for offshore storage.
The postponement only applies the agency noted for the future offshore licenses and not the awarded licenses or onshore efforts. In May 2023, the Danish Energy Agency completed the first tender for its onshore CCSC subsidiary. Ørsted was awarded a 20-year contract involving CCSC for two of its power stations in Denmark and starting in 2025 the plants will capture approximately 430,000 tonnes of biogenic CO2 every year that will be shipped to the Northern Lights project in Norway for offshore storage. In addition, this project will provide infrastructure that could potentially be used by other emitters to participate in CCSC efforts.
Denmark’s goal is to reach net zero carbon emissions in 2045. The plans foresee carbon capture and storage, as key components to reach the goal of carbon neutrality.
Source : The Maritime Executive