NSTA Launches 2nd UK Carbon Storage Licensing Round

The North Sea Transition Authority (NSTA) announced, in a statement posted on its website recently, that it has launched the UK’s second carbon storage licensing round.

“The NSTA has … opened a carbon storage licensing round offering 14 locations in Scottish and English waters for exploration and appraisal, and with potential to provide future capacity to support industrial decarbonization for the UK and Europe,” the organization said in the statement.

The areas which will be offered fall into two broad categories, the NSTA noted. These are “depleted hydrocarbon fields selected by the NSTA” and “saline aquifer sites identified following a ‘Call for Nominations’ which earlier this year enabled industry partners to indicate sites of interest which offered a greater chance of successful project delivery”, the NSTA outlined in the statement.

In its statement, the NSTA pointed out that the locations for the round were chosen “following extensive consultation with The Crown Estate and Crown Estate Scotland, among others”.

Five areas will be in Scottish waters, with nine off the coast of England, the NSTA revealed, adding that successful applicants for a carbon storage license from the NSTA will require a seabed agreement from either Crown Estate Scotland or The Crown Estate in English waters before a project can progress.

The licensing round will run until March 24, 2026, according to the NSTA, “after which applications will be reviewed with a view to awarding licenses in early 2027”.

NSTA Chief Executive Stuart Payne said in the statement, “the UK government has signaled its total support for carbon storage and the jobs and investment it can create as a vital part of the energy transition”.

“We are proud to be launching this licensing round, working in collaboration with other authorities especially Crown Estate Scotland and The Crown Estate to support this vital industry in the next stage of its development,” he added.

Ronan O’Hara, Chief Executive of Crown Estate Scotland, said in the statement, “carbon capture and storage (CCS) is an increasingly well-established process with the potential to play a key role in reducing carbon dioxide emissions, especially in hard to abate industries, which is why we are pleased to be working closely with CCS developers, the North Sea Transition Authority, The Crown Estate, and governments to ensure that deployment is coordinated to make the most of Scotland’s unique geological storage and to provide new economic opportunities for Scotland and the wider UK by inviting expressions of interest alongside NSTA license applications.”

Gus Jaspert, Managing Director, Marine at The Crown Estate, said in the statement, “carbon capture is vital in supporting hard to abate industries to decarbonize and a core element of the UK’s energy transition”.

“We have worked with the NSTA to ensure the interests of other vital sectors including offshore wind, aggregates, cables, and nature were considered. We look forward to continuing to work together and collaborating through our Marine Delivery Routemap program as we evolve our approach to seabed leasing for carbon capture and storage to support the sector’s development,” he added.

In its statement, the NSTA said it will continue to work with both Crown Estate Scotland and The Crown Estate “to explore opportunities to align licensing and leasing approaches in order to streamline application processes for developers”.

The NSTA highlighted in the statement that the UK’s first carbon storage licensing round was held in September 2023 and saw the award of 21 carbon storage licenses. The NSTA pointed out in the statement that it subsequently awarded the first storage permits to two projects, Endurance and HyNet, “allowing them to proceed towards first injection”.

“The projects, funded from the UK… government’s commitment of up GBP 21.7 billion [$29.0 billion], could contribute around GBP 5 billion [$6.6 billion] per year of gross value to the UK economy by 2050 and create 50,000 jobs long-term,” the NSTA said in its statement.

The NSTA noted in its statement that CCS involves the geological storage of captured CO2 emissions from industrial processes and said it will play a crucial role in decarbonizing the UK’s major industrial hubs.

“This CO2 is then transported from where it was produced and stored offshore, deep underground in geological formations,” the NSTA highlighted.

The organization pointed out in its statement that the UK’s Climate Change Committee (CCC) concluded that there was no viable path to net zero by 2050 without carbon storage. This committee “was established under the Climate Change Act 2008 and advises the UK and devolved governments on reducing emissions and adapting to the impacts of climate change”, the CCC states on its site. 

In a statement sent to Rigzone on Tuesday, which focused on the NSTA launching its second carbon storage licensing round, industry body Offshore Energies UK (OEUK) noted that the action marked “another key step in the UK’s effort to scale up CCS capacity across the continental shelf”.

In that statement, OEUK’s Head of Energy Policy Enrique Cornejo highlighted that “the UK has 78 gigatons of carbon storage – the largest in Europe”.

“This gives us a huge opportunity to cut emissions, meet our climate goals, and create high-quality jobs. With decades of expertise in the oil and gas sector, we already have the skills and infrastructure to make this a success,” he added.

“Right now, only a handful of projects are connected to storage sites, and delays mean we’re not fully using the capacity we have. Over 100 licenses will ultimately be needed to meet net zero, and it is vital existing licenses have a clear route to market,” he continued.

“Moving faster to match carbon storage with emitter needs will not only secure the UK’s leadership in Europe but also drive significant investment and job growth across our industrial regions,” he said.

“CCS isn’t just about cutting emissions, it’s about securing the future of UK industry, supporting regional growth, and positioning Britain as a global leader in clean technologies. This is a once in a generation opportunity we can’t afford to miss,” Cornejo went on to state.

Rigzone contacted the NSTA and the UK Department for Energy Security and Net Zero (DESNZ) for comment on OEUK’s statement.

In response, an NSTA spokesperson directed Rigzone to the statement posted on its website and said “that explains what we have done and the reasons why we have done so”.

“We feel that it is important that momentum is maintained in licensing potential carbon storage sites and working with them to reach first injection,” the spokesperson added.

“It is that need to maintain momentum that prompted us to open the call for nominations earlier this year and now the round itself,” the spokesperson continued.

DESNZ has not responded to Rigzone at the time of writing.

The NSTA licenses, regulates, and influences the UK oil and gas, offshore hydrogen, and carbon storage industries, according to its website. Although the NSTA has day to day operational independence from DESNZ, the UK Secretary of State for Energy Security and Net Zero sets the overall policy and legislative framework within which the NSTA operates and is ultimately responsible to parliament for the NSTA, the site outlines.

On its site, DESNZ states that it is responsible for UK energy security, protecting billpayers, and reaching net zero. OEUK describes itself on its site as “the leading trade association for the UK offshore energy industry, a not for profit membership organization with a history stretching back five decades”.

To contact the author, email andreas.exarheas@rigzone.com