The Norwegian government has hit the brakes on its development of full-scale CO2-capture at Mongstad – citing technical challenges and financing issues linked to difficulties in the refining and carbon-trading markets.
Under a revised strategy, a new carbon capture and storage (CCS) programme is to help realise full-scale CCS projects in Norway. The government added that it would ensure the financial and other conditions to incentivise industry to develop at least one such project by 2020.
The risk connected with integrating a full-scale capture facility at the Mongstad facility was too high, explained Ola Borten Moe, Norway's minister of petroleum and energy. The project, he said, would be both challenging and costly, particularly due to difficulties in the refinery industry in north west Europe.
"We are at a crossroads, and have to consider if the full-scale CCS project should be continued at Mongstad" said Borten Moe. "The government has concluded to consider other possible projects that can be realised within 2020, as agreed in the bi-partisan Climate Agreement in the Norwegian Parliament."
The depressed market for carbon trading allowances and economic recession in most of Europe also contributed to reduced commercial interest for CCS, added Norway's minister of environment Bård Vegar Solhjell.
Under the new programme, Norway will invest NOK400 million in the Mongstad Technology Centre (TCM) over four years. The country's CCS research programme Climit will also be increased by NOK100 million over two years.
Back in 2006, the Norwegian government and Statoil agreed on developing CCS technology at Mongstad in two stages: First, a technology centre (TCM), followed by the construction of a large scale plant at a later stage.
The large scale CCS project at Mongstad includes CO2 capture, transport and storage from the CHP plant at Mongstad. Captured CO2 was to be transported by pipeline for storage under the seabed in the North Sea.
TCM is claimed to be the only test centre to test two different types of technology applicable to emissions from both coal- and gas-fired power plants. The technologies to be tested during the first phase are based on chilled ammonia and amines.
The Centre has been constructed with a capture capacity of up to 100,000 tonnes of CO2 per year. It is owned by Gassnova (which manages Norway's state interests) (75.12%), Statoil (20%), Shell (2.44%) and Sasol (2.44%).