Opening of Northern Lights project: key takeaways for CCUS development

On 26 September 2024, the world’s first commercial cross-border, open access CO₂ transport and storage infrastructure network, Northern Lights, was officially opened in Norway. This milestone for the CCUS industry highlights how cross-border CCUS projects can be achieved.

The Northern Lights project is a joint venture between TotalEnergies, Equinor and Shell, founded in 2017, with construction of the main facilities commencing in 2021. The completed facility is now ready to receive and store CO₂ for emitters across Europe.^[1] 

Amongst the key factors that have contributed to reaching this milestone are Norway’s proactive conclusion of bilateral agreements with other countries to comply with its international law obligations; open-source infrastructure which can accept carbon dioxide from third party jurisdictions; and the Government’s engagement in CCUS through its financial backing, coordinator role and regulatory framework.

Managing international law hurdles

The London Protocol is an international convention that aims to prevent marine pollution. It establishes the international position on cross border transfer of CO₂ for the purpose of sub-seabed geological storage. There are over 80 jurisdictions party to the Protocol.

Signatory countries can choose to opt into an amendment that allows them to export CO₂. Jurisdictions seeking to transport CO₂ for storage to another country are required to ensure domestic environmental regulation meets the Protocol's minimum standards, and enter into agreements establishing arrangements for transport and storage in line with the London Protocol. 

Eight countries have opted into this amendment, including Norway. In the context of Northern Lights, Norway has proactively set out to enter bilateral agreements with its European neighbours. These include Sweden (April 2022), Belgium (April 2023), Denmark (April 2024), the Netherlands (April 2024) and Switzerland (May 2024). 

Open-source infrastructure 

As an open access infrastructure network, Northern Lights is capable of allowing emitters across Europe access to storage facilities. This is a world first, and establishes the concept of a more dynamic CO₂ storage market. This is a clear difference between Northern Lights and other CCS projects globally. For example in the UK, the Government has promoted the “cluster” model, which links chosen emitting facilities with carbon storage through a transportation pipeline. While this of course provides a storage solution for certain emitting facilities, it does not primarily support a broader base of emitters. More recently, we note that the UK Government has awarded some licences outside of the cluster process and is allowing a merchant market in the UK to also develop. 

Government participation in risk

The Norwegian Government has a strong vision for CCS in Norway and has demonstrated its commitment to the technology both financially and through the development of a CCS regulatory framework.

Northern Lights forms part of the Norwegian Government’s full-scale carbon capture and storage project, Longship. The Government is funding 80% of Phase 1 of this project.

A challenge for the development of full-scale CCS projects is that the industry is cautious to take on risk for the whole value chain. In the Longship project, the Norwegian Government has taken up a coordinating role, establishing tailored state aid agreements with each company in the CCS value chain meaning that each participant in the project will only bear the risk in relation to their own areas of responsibility. 

At the culmination of project, once the storage site has been closed down, long term liability for the stored CO₂ will fall to the Norwegian Government under law. 

The public-private collaboration involved in developing Northern Lights has boosted confidence in the project and contributed to investor buy-in.

What’s next? 

As the Northern Lights project enters its operational phase, CCS project developers and investors are keen to understand the underlying drivers that have supported the project to reach this stage. We hope that the opening of the project will encourage other CCS actors to push forwards on comparable cross-border projects in the sector. 

[1]Northern Lights celebrates completion of world’s first commercial CO2 transport and storage service - Northern Lights (norlights.com)