Longship – Carbon Capture and Storage

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Longship – Carbon Capture and Storage Norwegian Ministry of Petroleum and Energy Meld. St. 33 (2019–2020) Report to the Storting (white paper) Longship – Carbon capture and storage Meld. St. 33 (2019–2020) Report to the Storting (white paper) Longship – Carbon capture and storage Translation from Norwegian. For information only. Longship The Norwegian Government has decided to call the Norwegian project on car- bon capture, transport and storage Longship, in Norwegian ‘Langskip’. The characteristic shape, and flexible, supple construction of the Vikings’ long- ships made them one of the greatest innovations and most ground-breaking ship-building technologies of their day. Longships were sleek, seaworthy and fast vessels, making them highly suitable for war and plundering voyages. However, trade was more important than plundering. The longships enabled the Vikings to become long-distance traders who exchanged valuable goods from the North with goods from faraway lands, such as silk and spices. Despite our ancestors often spreading fear along their path, longships have become a familiar symbol worldwide of the Viking Age and are associated with Norway. Like those who built the longships, we also aim to take our technology out into the world, but only by peaceful means. The Government places major emphasis on Longship being a cost-effective solution for carbon capture and storage, and a technology that many can utilise. In the same way as it was hard work to build a longship using the clinker method, a major effort from companies and a significant amount of public financing are required to realise a cost-effective solution for carbon capture and storage. Longship is the result of many years of hard work across several Norwegian governments. Authorities and industry representatives have worked together towards a shared goal, and the decision basis the Govern- ment is now presenting to the Storting is extensive, robust and quality-assured. The Vikings’ longships could make use of the wind through their sails, but it was often necessary to use raw manpower to row the ships. In both instances, the crew had to work together. In much the same way, we must also continue to work together to implement the project in the best way possible. Those boarding a longship and setting out to sea in the Middle Ages quite often sailed into the unknown. Now that our own Longship is ready for con- struction, we are also entering uncharted waters. We do not know for sure what price will be levied upon CO2 emissions over the next decades. Uncer- tainty in terms of how the market for CO2 storage will develop in Europe will remain. However, we can be relatively certain that Longship will be an impor- tant contribution to creating value chains for carbon capture and storage in Europe. We can also have great faith that the project will contribute to techno- logical development and learning at such a scale that the costs of the next car- bon capture facility to be built will be lower than the first. Longship will bring Norway to the forefront of the development of a tech- nology that could prove decisive in achieving our climate targets. Contents Longship .......................................................... 3 4.2.7 Evaluation and ranking of Norcem and Fortum Oslo Varme ............... 41 1 Introduction................................... 7 4.3 Relevant regulations ...................... 42 4.3.1 International and regional 2 The background for frameworks ..................................... 42 prioritising CCS ........................... 9 4.3.2 National regulations ...................... 44 2.1 The Paris Agreement as the basis for prioritising CCS ........................ 9 5 Gassnova and the external 2.2 What is carbon capture quality assurer’s assessment ... 48 and storage? .................................... 10 5.1 Gassnova’s assessment ................. 48 2.3 CCS and the Sustainable 5.1.1 Gassnova’s evaluation of the Development Goals ........................ 12 capture projects ............................. 48 2.3.1 Climate targets and the role 5.1.2 Gassnova’s assessment of the of CCS .............................................. 12 CO2 transport and storage project 49 2.3.2 Carbon capture and storage in 5.1.3 Gassnova’s overall assessment .... 49 different sectors .............................. 14 5.2 The external quality assurers’ 2.3.3 The Sustainable Development assessment ..................................... 50 Goals ................................................ 15 2.4 Status of the global development 6 Benefits and costs of of CCS .............................................. 16 Longship ....................................... 52 2.5 CCS in Europe ................................ 17 6.1 Benefits ........................................... 52 2.5.1 Status ............................................... 17 6.1.1 Climate effects ................................ 52 2.5.2 EU support schemes ...................... 18 6.1.2 Business development .................. 53 2.6 Norway’s conditions for 6.2 The state’s costs and risks ............ 56 investment in CCS .......................... 19 6.2.1 Cost overview ................................. 56 6.2.2 Funding from other sources ......... 57 3 Need for state aid for CCS ....... 22 6.2.3 Risk .................................................. 57 3.1 Market failure in relation 6.3 Measures to manage risk in the to CCS .............................................. 22 project ............................................. 66 3.2 Development of new CCS 6.3.1 The industry’s incentives in the projects will lead to lower costs .... 23 agreement ....................................... 66 6.3.2 Project management ..................... 66 4 The result of the targeted work 6.4 The project’s socioeconomic on carbon capture and storage 25 profitability ..................................... 67 4.1 Follow-up of the Government’s strategy for CCS work ................... 25 7 How do we make CCS 4.1.1 Gassnova SF ................................... 25 successful? ................................... 70 4.1.2 National policy instruments for 7.1 Phases of market development .... 70 promoting research, development 7.2 Other countries must and demonstration ......................... 25 support CCS ................................... 70 4.1.3 International work .......................... 26 7.3 The road ahead for the 4.1.4 Planning of the project ................... 27 Government’s work on CCS ......... 71 4.2 Longship – a cost-effective 7.3.1 Research, development, solution for full-scale CCS ............. 29 demonstration and 4.2.1 Norcem ............................................ 30 international work .......................... 71 4.2.2 Fortum Oslo Varme ....................... 31 7.3.2 Further work on industrial-scale 4.2.3 Northern Lights .............................. 33 CCS ................................................. 72 4.2.4 Cost estimate .................................. 36 7.3.3 The Government will contribute 4.2.5 Benefit realisation .......................... 36 to developing technology for 4.2.6 Frameworks for investment and carbon capture, transport operation ......................................... 40 and storage ..................................... 72 8 Development plan for 8.2.1 The Ministry’s assessment of Northern Lights ........................... 74 the development plan .................... 79 8.1 Plan for development, installation and operation .................................. 74 9 The Ministry of Petroleum 8.1.1 Introduction .................................... 74 and Energy’s assessment ......... 80 8.1.2 Development solution .................... 75 8.1.3 Volume, timeline and List of references .......................................... 84 development phases ....................... 76 8.1.4 Investments and economics .......... 76 Appendix 8.1.5 Shutdown and disposal .................. 76 8.1.6 Impact assessment ......................... 77 1 Power of attorney to enter into 8.2 Assessments of the plan for agreements and incur obligations development, installation for the state for Longship and operation .................................. 78 (Carbon capture and storage) ...... 87 Longship – Carbon capture and storage Meld. St. 33 (2019 – 2020) Report to the Storting (white paper) Recommendation from the Ministry of Petroleum and Energy of 21 September 2020, approved by the Council of State on the same date. (Solberg Government) 1 Introduction The Government will contribute to developing Longship will demonstrate that CCS is safe technology for carbon capture, transport and stor- and feasible, and will facilitate learning and cost age and facilitate a cost-effective solution for full- reductions in subsequent projects. Infrastructure scale carbon capture and storage (CCS) in will be developed with additional capacity that Norway, which will stimulate technological devel- other projects can utilise. Hence, the threshold for opment in an international perspective. establishing new carbon capture projects will be The Government proposes to the Storting that lowered. Longship can also facilitate business funding be provided for the implementation of a development through harnessing, transforming Norwegian demonstration project for full-scale and developing new industries in Norway. CCS that encompasses carbon capture, transport Based on the knowledge currently available, and storage. The project has been named ‘Long- CCS will be necessary to reduce global green- ship’. The Government proposes implementing a house gas
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