14 Companies Secure Licenses for Carbon Storage in the UK North Sea

Following the UK's first-ever carbon storage licensing process, the North Sea Transition Authority (NSTA) on Friday released the list of firms that had accepted licenses.

A total of 14 companies have been awarded 21 licences in depleted oil and gas reservoirs and saline aquifers which cover around 12,000sq km – an area equivalent to the size of Yorkshire.

The locations could store up to 30 million tonnes of CO2 per year by 2030, approximately 10% of UK annual emissions which were 341.5 million tonnes in 2021.

Shell, Perenco, and ENI have all been awarded licenses off the coast of Norfolk in sites that could form part of the Bacton Energy Hub – a carbon storage, hydrogen and offshore wind project, which could provide low-carbon energy for London and the South East for decades to come and help in the drive to net zero greenhouse gas emissions.

Other locations include sites off the coasts of Aberdeen, Teesside, and Liverpool.  

Stuart Payne, NSTA Chief Executive, said: “Carbon storage will play a crucial role in the energy transition, storing carbon dioxide deep under the seabed and playing a key role in hydrogen production and energy hubs. It is exciting to award these licences and our teams will support the licensees to bring about first injection of carbon dioxide as soon as possible. We will also continue to work with industry and government to enable further licensing activity and back the UK’s drive to net zero emissions.”

It is estimated that as many as 100 storage licenses will be needed to meet the requirements for reaching net zero and the volume of applications received for the first round demonstrated the industry’s desire for further opportunities, the NSTA said.

The NSTA will assess the response and the quality of opportunities in locations across the UK before deciding when to run a second round.

Six licences have already been granted by the NSTA and the Government recently announced £20bn funding for the progression of these existing projects. Two locations, Hynet and the East Coast Cluster, have been selected as Track 1, while Acorn and Viking CCS projects have been chosen as the Track 2 clusters.

The cluster sequencing process was set up to give the industry the certainty it requires to deploy carbon storage at pace.

Lord Callanan, Minister for Energy Efficiency and Green Finance, said: "The UK has one of the largest potential carbon dioxide storage capacities in Europe, putting us in prime position to be world leaders in carbon capture – which is why we’ve committed an unprecedented £20 billion to develop the early stage development of carbon capture, usage and storage (CCUS)."

OEUK Sustainability and Policy Director Mike Tholen said:

“Carbon capture and storage will be a major tool in the fight against climate change and will drive economic growth. With the potential to store up to 78 billion tonnes of carbon dioxide underneath the UK's oceans, the UK can lead the way.

“We have an oil and gas industry with the right expertise, skills, and people needed to make this a British success story, and these licenses are another step towards achieving that goal.

“If we get this right, it could not only significantly reduce the UK’s carbon footprint, but position us as world leaders in the low carbon space – creating opportunities for UK people and businesses and playing on our industrial strengths.

“We will need 100 such sites or more to reach net zero, so we mustn’t stop here. The companies investing in nascent opportunities like carbon storage will require the cash flow from a stable and predictable oil and gas business to fund these technologies.

“That is why we need continued support from government across the whole energy landscape, and long-term, competitive energy policies that attract the investment and innovation we will need to make sure these solutions are being built in the UK, for the UK.”

Details of Licensees