UK launches second carbon storage licensing round for 14 sites

The North Sea Transition Authority has launched the UK's second carbon storage licensing round, offering 14 offshore locations with potential capacity for up to 2 billion metric tons of CO2 storage, the NSTA said in a statement on Dec. 9.

The licensing round, which runs until March 24, 2026, includes five areas in Scottish waters and nine off the English coast, comprising both depleted hydrocarbon fields selected by the NSTA and saline aquifer sites identified through industry nominations.

The NSTA aims to award licenses in early 2027, it said.

"The UK government has signaled its total support for carbon storage and the jobs and investment it can create as a vital part of the energy transition," NSTA Chief Executive Stuart Payne said in the statement.

The new round builds on momentum from the UK's inaugural carbon storage licensing process in September 2023, which awarded 21 licenses.

Two of these -- the Endurance store that will serve the East Coast Cluster and the Liverpool Bay store for the HyNet cluster, both with 100 million mtCO2 capacity -- have received 25-year storage permits and are under development under the government’s Track 1 carbon capture, use and storage cluster program.

"This licensing round is a crucial step in unlocking the full potential of CCUS to decarbonize industry, create skilled jobs and strengthen the UK’s energy security," UK Director of industry group the Carbon Capture and Storage Association Mark Sommerfeld said in a statement.

The CCSA stressed "the urgent need for both additional CO2 storage capacity, which will be delivered by this new round, while also ensuring that existing licensed projects are given a clear route to market to complete the development of their stores.”

CO2 storage developers have warned that the industry needs a route to market for projects outside the government's Track cluster sequencing process.

The CCSA said there were over 100 CCUS projects in the UK development pipeline, up from around 90 in 2023, which would capture 77 million mt/year of CO2 by the mid-2030s.

It said 44 million mt/year of CO2 from the EU could be cost-effectively stored in UK sites.

Successful applicants under the second round will require seabed agreements from Crown Estate Scotland or The Crown Estate before projects can advance.

The NSTA said it would collaborate with Crown Estate Scotland and The Crown Estate to align licensing and leasing, helping to streamline applications for developers.

Platts, part of S&P Global Energy, assessed nearest December UK ETS CO2 allowances at GBP55.82/mt ($74.30/mt) on Dec. 8, compared with industry estimates of full value chain CCS costs in the region of $130-$150/mt.