In This Article:
Britain risks losing an “early mover” advantage in a nascent net zero technology unless a shipping deal is struck with the EU, a North Sea energy company has warned.
Enquest, which runs the Sullom Voe oil terminal on the Shetland Islands, is one of several companies racing to develop carbon storage sites that will pump carbon dioxide undersea to be locked up in old oil and gas reservoirs.
But the company has warned that while the UK holds advantages, due to the number of depleted oil and gas fields that could be repurposed to hold CO2, it will be unable to trade CO2 cargoes with Europe unless an agreement is reached with Brussels on the “London Protocol”.
The protocol, along with the older London Convention, is an international agreement designed to stop waste being dumped in the oceans. In its current form, that would prohibit shipments of CO2.
However, the International Energy Agency (IEA) has called for protocol signatories to adopt an amendment that would allow trade to begin flowing.
Rishi Sunak announced £20bn of funding for carbon capture projects in July as part of a package designed to “defend the public” against the disruption of energy supplies caused by the Kremlin’s invasion of Ukraine.
Salman Malik, chief financial officer of Enquest, said accepting European cargoes of CO2 could be a potentially lucrative business but that Britain risked missing out unless solving the issue was made a priority.
With a deep water jetty and direct pipeline links to oil fields, Enquest’s Sullom Voe terminal is one of the sites where CO2 could arrive by ship and be pumped into storage.
It is thought that up to 10 millions tonnes of CO2 could be stored via Sullom Voe per year, or one billion tonnes over the site’s lifetime. Injections would begin in the late 2020s if Enquest gives final approval to the project.
Mr Malik said discussions were already under way with potential European industrial customers that needed to store carbon.
He said: “The Europeans are short of storage capacity, so we expect to play a very significant role there.
“But there is a roadblock which needs to be overcome - we will need engagement between the governments to facilitate the transportation of CO2 across borders.
“This industry is in its infancy and in the current environment, you would need ratification from the European [Union] to allow that.
“It’s certainly on the radar, and it’s been communicated fairly regularly to the UK Government, and we’re certainly keen to see an acceleration of those conversations to allow us to maintain an early mover advantage in this space.”