Denmark Grants First Land Carbon Storage Licenses

Denmark Grants First Onshore CO2 Storage Licenses

On June 21, 2024, Denmark made a groundbreaking announcement regarding the issuance of its initial three licenses for large-scale carbon dioxide (CO2) storage exploration on land, signaling a pivotal step in the fight against climate change. This move underscores Denmark's strategic geological advantage for secure CO2 storage, in stark contrast to Germany's prohibition of onshore CO2 storage due to safety apprehensions. The recipients of the licenses include Wintershall Dea and INEOS, CarbonCuts (a BlueNord subsidiary), and a consortium consisting of Equinor and Ørsted. Denmark's state-owned fund, Nordsofonden, is set to partake in all three projects, emphasizing the critical role of carbon storage in advancing climate objectives. The licensing round attracted the interest of 10 companies, with further safety assessments required before actual storage permits are granted. A potential storage location near Havnso, approximately 70 kilometers from Copenhagen, is currently under deliberation. Denmark has previously authorized licenses for CO2 storage exploration in the North Sea. Meanwhile, Germany aims to modify its regulations to permit offshore carbon capture and storage, while maintaining the prohibition of onshore storage. David Bucknall, the CEO of INEOS Energy, commended the new onshore license, emphasizing its significance in achieving EU climate targets and facilitating a robust CCS market.

Key Takeaways

• Denmark issues its first three licenses for onshore CO2 storage exploration.
• Licenses are awarded to Wintershall Dea, INEOS, CarbonCuts, Equinor, and Ørsted.
• Denmark's subsoil is found suitable for secure CO2 sequestration.
• Nordsofonden to have stakes in all three onshore CO2 storage projects.
• INEOS Energy CEO highlights the importance of CO2 storage in EU climate targets.

Analysis

Denmark's decision to issue licenses for onshore CO2 storage leverages its unique geological advantages, differing from Germany's constraints. This move has the potential to expedite Denmark's climate objectives and stimulate the CCS market, potentially influencing EU policies. The involvement of major industry players such as Wintershall Dea, INEOS, and Equinor indicates substantial investment and innovation in carbon capture technologies. Immediate impacts include heightened research and safety evaluations, with long-term benefits potentially encompassing reduced emissions and strengthened alignment with the EU climate strategy. This initiative may also exert pressure on other nations to reconsider their carbon storage policies, particularly in relation to onshore versus offshore options.

Did You Know?

• Carbon Capture and Storage (CCS): A technology that can capture up to 90% of the carbon dioxide emissions generated from the use of fossil fuels in electricity generation and industrial processes, preventing the release of carbon dioxide into the atmosphere. CCS involves the capture, transportation, and long-term storage of carbon dioxide, frequently in geological formations.
• Wintershall Dea: A prominent European independent gas and oil company, resulting from the merger of Wintershall and DEA of Germany/Spain. Its operations span multiple countries, focusing on the exploration and production of natural gas and crude oil, and it is now expanding into CCS technologies to support climate objectives.
• Ørsted: Originally a Danish oil and gas enterprise, Ørsted has evolved into a global leader in renewable energy, particularly offshore wind. It is actively involved in various sustainability initiatives, including CCS, to further its commitment to a green energy transition and the reduction of carbon emissions.