(Adds details on legal challenges, quotes)
OSLO, Sept 5 (Reuters) - Norway's Equinor signed
preliminary agreements on Thursday with seven potential
industrial customers for its project to develop carbon dioxide
storage under the North Sea, a crucial step towards securing
state funding.
The project, called Northern Lights and led by Equinor in
partnership with Shell and Total, is part of
the country's efforts to combat climate change.
Proponents of carbon capture and storage (CCS) say countries
need the technology to help fulfil pledges made on the heels of
the breakthrough Paris climate change agreement in 2015.
Environmentalists worry the costly CCS technology will
perpetuate the fossil fuel status quo when rapid and deep cuts
in energy use are needed to limit global warming.
The world's leading metal producer ArcelorMittal,
cement producer Heidelberg Cement, Sweden's largest,
privately-owned refiner Preem are among the firms who signed the
memorandums of understanding (MoUs) on Thursday.
The Norwegian government said the industry's commitment
would be crucial for it to decide on whether to invest in the
project, which aims at capturing and storing up to 5 million
tonnes of CO2 from various industrial sites onshore.
"The signing of the MoUs are the right step in that
direction," Norway's Oil and Energy Minister Kjell-Boerge
Freiberg said at a press conference. "You've shown that a larger
CCS network in Europe is possible."
Preliminary estimates from 2016 showed it could cost between
7.2 billion Norwegian crowns ($801.7 million) to 12.6 billion
crowns to establish a full CCS chain, including CO2
transportation by ships from two onshore sites in Norway, and
the subsea storage.
So far, Norway has spent 825 million Norwegian crowns to
develop the full-scale CCS project, which also involves building
carbon capture facilities at onshore industrial sites in Norway.
LONDON PROTOCOL
"Nothern Lights... could become the world's first
cross-border CO2 storage," Equinor's Chief Executive Eldar
Saetre told a news conference.
That, however, also depends on whether international laws
can be amended to allow cross-border transport of CO2 for
storage under the seabed.
The so-called London Protocol, an international convention,
bans its signatories from exporting waste to other countries for
dumping or incineration at sea.
An amendment exempting export of CO2 for storage purposes
was agreed in 2009, but only six countries out of 52
signatories, including Norway, Britain and the Netherlands, have
ratified it so far. Ratification by two-thirds is required.
As a temporary solution, Norway and the Netherlands have
proposed allowing the implementation of the amendment for those
countries who had ratified it. The proposal is expected to be
discussed at the meeting of London Protocol signatories in
London in October, and requires a consensus to be approved.
"We are supporting that, and we will be proactive. The EU
will spare no efforts in ratifying this amendment," EU Climate
Commissioner Miguel Arias Canete told a new conference during a
visit to Oslo on Thursday.
($1 = 8.9810 Norwegian crowns)
(Reporting by Nerijus Adomaitis; editing by Emelia
Sithole-Matarise)
