ZERO is pleased that all the three great and ambitious CCS projects now will be further developed with the goal of realization. And not least that the Government suggests to add another 100 million to this effort. Thus, yet another milestone and a possible obstacle for these industries are passed.
This is necessary new impetus and funding for industry in a prolonged uncertain process. The different parts of the value chain: capturing, transportation and storage of CO2, must now be developed in parallel. The same must the work to establish effective economic instruments. It is central to the three industrial projects which will now consider whether they can invest considerable time and resources in the next phase.
Crucial for climate targets
For Norways climate targets it is essential that all three projects are realized in the end, both when it comes to national cuts and international obligations
Together, these three players cut emissions of 1.3 million tonnes of CO2 per year, as much as a million cars. If all these projects are carried out Norway will not just have taken a big step towards achieving our own commitments on emission reduction - we have also taken a leading international role in a technology field that is going to be extremely important in the coming decades, and that could potentially replace many of the jobs that will be lost in the oil and gas industry.
An unique industry mix
It is three very different CCS projects that now will be further developed in a so-called concept and preliminary design phase (FEED), with the aim of investment and construction. Norcem cement plant in Brevik, Yara's ethanol plant in Porsgrunn and Klemetsrud waste facility in Oslo represent very different types of industries and emission sources. It is good that the Government sees that it is important to invest in several branches of climate-friendly industries. A realization of multiple capture projects will also make the entire value chain less vulnerable and more cost effective.
Long term conditions
It is nevertheless worrying that this is so dependent on political processes, and that the investment decision is set to 2019. Not the least it means the possibility of changed parliamentary composition and change of Government in the meantime, with all the uncertainty that entails for the industrial companies concerned. Lien can not on one hand expect "that the commercial players commit and move forward," and on the other side not securing long-term and predictable conditions for the industry.
Carbon capture provides increased operating costs, and there is a need to examine a model covering the increased cost of full-scale projects. This is an important prerequisite that should be clarified in advance of the investment decision. It should be developed and established an operational guarantee for the selected projects.
It is also important to gain more knowledge about the value chain, including the possibility of a CO2 deposit scheme, and barriers to CO2 management, and this should be investigated further. Funding for such work should also be part of the focus on the three CCS projects. The sooner we have a concrete decision on this, the earlier and clearer predictable economic conditions for the industry. Which in turn makes them comfortable in investing time and resources in the period ahead. The government must conduct an open process on this and submit proposals for the implementation of selected funding models (s) in the revised budget for next year.