Denmark Allocates $3.9B to Carbon Capture/Storage as it Accelerates Timing
Denmark has unveiled an extensive carbon capture and storage plan, backed by substantial government support, as part of an accelerated timeline aimed at fulfilling climate objectives in Denmark, Europe, and globally. This announcement follows a recent delay in Denmark's second tender for offshore CO2 storage, attributed to the need for a comprehensive plan addressing government involvement in the sector.
Lars Aagaard, the Climate, Energy, and Supply Minister, shared during a briefing at Avedøreværket, a power station near Copenhagen, that the requirement for complete CO2 capture is being moved up from 2030 to 2029. The goal is to expedite the process of extracting carbon dioxide from the atmosphere and storing it underground. Aagaard emphasized the significance of providing a clearer framework for the growing industry to enhance its scalability and cost-effectiveness.
The government's approach revolves around consolidating resources and establishing transparent regulatory conditions to facilitate CO2 capture and storage, benefiting Danish industries. The new plan, introduced by the energy minister alongside Business Minister Morten Bødskov and Transport Minister Thomas Danielsen, envisions two major tenders—set for 2024 and 2025—instead of smaller ones. Approximately $3.9 billion will be invested over a 15-year span, with about $1.5 billion allocated for the 2024 tender and nearly $2.4 billion for the 2025 tender. The aim is to establish carbon capture and storage capacities of 0.9 million tons in 2024 and an additional 1.4 million tons in 2025.
Denmark is committed to maintaining a 20 percent state ownership stake, replicating the model used for the initial three licenses. This was a crucial point of resolution before progressing with the subsequent offshore tender. While the original target mandated Denmark to capture at least 3.2 million tons of CO2 annually by 2030, the updated plan advances the program's requirement to 2029, potentially initiating large-scale capture and storage efforts as early as 2028.
The plan also addresses essential parameters for the industry, encompassing ownership and regulatory aspects for CO2 transport through pipelines. The government intends to expand existing CO2 transport regulations to encompass all transport forms, particularly relevant for transporting CO2 to PtX facilities and offshore storage via ports. By offering enhanced clarity and broadening the scope, Denmark seeks to encourage wider company participation and engagement.
Denmark had previously awarded initial exploration licenses for offshore carbon storage, including a provisional license for testing and demonstrating the world's first offshore storage operation. Furthermore, licenses were granted to industrial facilities for initiating carbon capture projects, initially centered around a facility owned by Ørsted. This initiative is designed to establish infrastructure facilitating the participation of other industrial emitters in the future.