By Akshat Rathi
Norway has been here before. In 1991, the country introduced a carbon tax for offshore oil drilling. That was one reason why Statoil (now Equinor) built some of the world’s first carbon capture plants aimed solely at reducing emissions. The millions of tons of carbon dioxide that these plants buried are monitored and expected to remain underground for many thousands of years.
Some view the latest project with skepticism. It comes less than a decade after the country scrapped a CCS project, dubbed Norway’s “moon landing” by former Prime Minister Jens Stoltenberg. That plan would have involved capturing emissions from a gas-power plant and a petroleum refinery, but its complexity was underestimated and costs eventually proved prohibitive.
This time might be different. Norway has two cement factories and some 20 waste-to-energy plants, which are expected to continue to operate for decades to come. Carbon capture is the only technology to cut emissions from these plants.
Olav Øye of Bellona Foundation, an environmental think tank, says the cost of the carbon dioxide captured by the project would be approximately $140 per metric ton. That’s about five times the current price of the EU permits for carbon emissions. That certainly makes it seem expensive, but it’s the wrong way to think about it, says Øye.
A sensible comparison is government funding for electric vehicles. By one estimate, Norwegian government subsidies for electric cars effectively cost the state about $1,350 per ton of carbon dioxide avoided (assuming a car has a 10-year life). In the transport sector the government is ready to bear higher costs because it doesn’t have a cheaper alternative—and the country is pushing to become carbon neutral as early as 2030. In March 2020, about 75% of all cars sold in Norway were plug-in electrics—the highest such share in any country.
“For Norway, CCS has never been considered as something socio-economically profitable,” Prime Minister Erna Solberg said in an interview on Friday. “The question in any event is: Does this provide the learning effect needed to give CCS the chance to be developed in the future, and will the fact that we develop this create the basis for other business activities?”
The $2.6 billion CCS project could lower the cost of the technology and open up a new business opportunity for Norway. As other European countries also look to the technology, the Norwegian shelf could become the place where the emissions are buried.