The North Sea Transition Authority (NSTA), which oversees the exploration and development of the UK’s oil and gas resources, has granted 20 licenses to 12 companies for developing offshore carbon dioxide (CO2) storage, as reported by the Financial Times on May 19. This marks the first round of carbon storage licensing in Europe. The selected companies, primarily oil and gas producers, will utilize carbon capture and storage (CCS) technologies to inject captured CO2 into depleted oil and gas fields. NSTA expects the injection into the first storage sites, consisting of depleted oil and gas fields and porous rock formations, to commence within six years.

The announcement follows the UK’s commitments in March to invest up to GBP20bn (USD24bn) over the next 20 years to local CCS projects. The objective is to advance the country’s 2050 net-zero target and expand green employment opportunities. With these investments, the UK aims to have CCS projects capable of annually storing up to 30 million tons of CO2 by 2030, which is approximately 10% of the nation’s total annual emissions. However, the government has yet to determine the specific form of financial support for CCS schemes, while the establishment and operation of each large storage site are expected to cost billions of pounds. Currently, the developers can physically assess the storage sites, but they still need additional permits and leases before they can start commercial storage.

Sources:

https://www.ft.com/content/2c907ac7-9d3e-4d6c-ab26-dde454332096

https://www.reuters.com/world/uk/britain-awards-20-offshore-carbon-storage-licences-12-firms-2023-05-18/

https://www.bloomberg.com/news/articles/2023-03-15/uk-makes-20-billion-bet-on-carbon-capture-in-race-against-us?leadSource=uverify%20wall