Denmark has received its first permits for exploring the viability of onshore CCS in its subsurface. Why the move to onshore, and what are the professional perspectives on the permitted prospects?

Denmark has already demonstrated itself as a leader for CCS in Europe through Project Greensand. This is an offshore project supported by 23 Danish and international partners, including the Danish state’s Energy Technology Development and Demonstration Programme (EUDP).

Greensand is still in an early phase, with trial injection of CO2 taking place in 2023 at the Nini West field in the North Sea. The aim is to create a value chain for offshore CO2 storage in the country by 2025-26.

Denmark has now turned its attention to the onshore. The Danish Energy Agency (DEA) awarded three permits sites in June.

The consortium behind Greensand – Ineos, Wintershall Dea and Denmark’s state-owned Nordsøfonden – received one of these, in the Gassum formation in Jutland.

*Project Greensand. Source: Wintershall Dea*

This is the first licensing of its kind in the country. There has been onshore hydrocarbon exploration, but it’s a new move for carbon storage.

DEA director Kristoffer Böttzauw said this was an “important step” to award the first onshore permits. “CO2 storage is crucial for us to reach our climate goals, and our subsoil has the special qualities needed to be able to store CO2 safely and securely.”

Böttzauw said the decision had been carefully considered. The DEA acted to ensure the permits are “realistic and justifiable to implement in relation to the collection of the necessary data and the detection of risks. In addition, all companies have been assessed as to whether they have the necessary technical and financial capacity.”

The applicants and awardees

The Danish agency allocated five onshore CCS licences. It received nine applications, from 10 companies.

Gassum: DEA granted Ineos E&P, Wintershall Dea International and Nordsøfonden the right to explore the Upper Triassic – Lower Jurassic formation.

From a previous evaluation of CO2 storage in the NORDICCS project, a simulation indicated a project could store up to 1 billion tonnes of CO2 within the formation. Concito, a local think tank, has reported the onshore licence could store 630 million tonnes.

However, this was a conservative estimate at the time, based on poor quality seismic data.

Rødby: CarbonCuts and Nordsøfonden will work on this licence, which contains the Bunter sandstone formation.

The Geological Survey of Denmark and Greenland (GEUS) reported the licence held salt diapirs in the subsurface that “are still very active, causing land uplift”].

CarbonCuts, a subsidiary of local operator BlueNord, aims to store 1 million tonnes per year at the site, which it calls Ruby. Concito puts total storage capacity at 152mn tonnes.

Havnsø: Located in western Zealand, Equinor Low Carbon Solutions Denmark and Ørsted Carbon Solutions, along with Nordsøfonden, will work on the area. In 2007, GEUS suggested in a report that this structure might be one of the best places for CO2 storage in Europe. Equinor projected it could store up to 12mn tonnes per year of CO2 at the Danish site. Concito has projected storage of up to 926mn tonnes.

The DEA did not issue permits for Stenlille and Thorning. Stenlille is considered the most studied aquifer in Denmark and is the anchor for a project known as CO2RYLUS. Gas Storage Denmark has talked of moving to store CO2 at the site.

It was unclear why the DEA did not award a licence on Stenlille. It may have been out of concern over co-location with gas storage.

Standards and capacity

All three of the awarded prospects will now need to carry out an in-depth appraisal to learn more about their acreages. It is worth noting that these targets are all saline aquifers, which seem to be gaining momentum in industry for their high potential CO2 storage capacities.

Following this assessment phase, and assuming the sites appear safe and suitable, these rights holders can then apply for permission to begin storage.

An Ineos spokesperson told E-FWD what to expect. The company will have to prove the geological capacity at the site, the official said.

“Among other things, a full environmental impact assessment [EIA] must be carried out. Taking the site into operation is subject to approval by the [DEA] and environmental approvals from the local and national environmental authorities. This will of course happen in close collaboration with both national and local authorities and stakeholders,” they added.

Environmental and safety standards for CO2 storage must comply with both DEA and the Danish Environmental Protection Agency’s standards.

Onshore vs offshore

The move from off- to onshore raises new challenges. There are limiting factors such as space, residential amenities, social conflict or planning permissions. However, the advantages may outweigh any onshore complications.

Michael McCaughey of Elgol Geoscience shared some perspectives with E-FWD. “The onshore prospects benefit from their onshore location, which significantly reduces costs for drilling and facilities (but not seismic). With CCS economics currently somewhat marginal and requiring government subsidy, this cost advantage is very significant.” 

Another cost advantage comes in the use of pipelines for CO2 transportation, rather than shipping. Greensand’s trial phases involved CO2 deliveries by ISO tank.

“If the onshore prospects are successfully appraised and developed with the operator quoted injection rates/capacities, the recently awarded onshore Gassum formation stores could be the lowest cost in Europe”, McCaughey said. This “could really get CCS moving and help the EU reach its targets”.

The expert went on to say Gassum had “great potential for CO2 sequestration as it is at the right depth, is laterally continuous with good permeabilities and reasonable thickness, is capped by a thick seal and has structures to contain the injected CO2.”

This all gives some economic hope to the prospect, but onshore operations come with complications. Companies must work much more closely with those who live and work around sites.

McCaughey said wells and facilities “should not be invasive and the awarded operators are mostly highly experienced in managing projects with subsurface risk”.

Support of the local communities and population is paramount. CarbonCuts has mentioned receiving strong support from local politicians, who view CCUS as important in expanding the Lolland region of Denmark as a green energy hub.

There are hurdles around the regulatory side of things, though, particularly overseeing CO2 injection.

Lessons from the past

Community acceptance onshore is critical. Without it, the industry will repeat the failures of the Netherland’s Barendrecht project. Shell set out plans for this project in 2007, with an aim of building out onshore CCS.

The locals did not endorse the project, though.

Interminable debates caused delays to the project. Eventually the national government cancelled the plan.

In hindsight, one of the problems identified was an assumption that people would support CCS from the outset.

What actually happened was that opposition intensified.

As researchers wrote, “overall national support should therefore be guaranteed prior to the start of the project”.

This need for additional consultations and consensus building weighs against onshore plans. “The extra planning requirements for onshore and the need to acquire more data to properly appraise the stores may result in a longer time to reach first injection compared to an offshore depleted field like Total’s Bifrost,” McCaughey added.

Looking ahead

One of the areas that Denmark will benefit is its history of oil and gas, with industrial knowledge and support meeting subsurface data.

An Ineos spokesperson told E-FWD that Denmark’s subsurface has “significant potential for CO2 storage”.

According to analysis by GEUS, there is capacity to store between 12 and 22 billion tonnes of CO2 in the country’s subsurface. This is equivalent to 400 to 700 times Denmark’s annual emissions. As such, it sets Denmark up to be able to store CO2 from other countries across Europe as well as its own emissions.

“It is early days yet but Ineos and Denmark are in a strong position on CCS. On March 8, 2023, Project Greensand initiated the world’s first cross-border offshore CO2 storage intended to mitigate climate change,” the Ineos spokesperson said.

Learning from Denmark

The country has demonstrated its intent to make progress on storing CO2. There is a clear opportunity for Denmark to parlay its initial move into storage – with Greensand – into a broader offering for emissions from across Europe.

First, operators must iron out any issues that can arise from the onshore location. On June 27, the DEA committed to continuing the conversation with local residents through an online orientation meeting for citizens in the permitted areas.

Moving CCS onshore puts the question of CCS into the broader public discussion of Denmark. Offshore keeps these operations away from all but the most involved critics. To succeed onshore, companies must demonstrate rigid adherence to safety and environmental standards.

There are lessons from Denmark for the UK, particularly around making onshore installations acceptable to the public.

E-FWD’s Global CCUS Investment Index, with GaffneyCline, ranked Denmark as joint third in the world, with Norway. Before 2020, Denmark prohibited the injection of CO2 underground.

In 2020, the government changed its position, giving CCS a key role in the country’s plans to cut emissions.

Demonstration of the determination to support CCS in Denmark received further support with plans to subsidise projects. The DEA, at the end of June, announced its CCS Fund, with tender materials to be published in October.

The fund will pay a subsidy per tonne of CO2 stored. Market participants will be able to bid a fixed quantity per year that they will capture – and receive the subsidy.

This move to license onshore sites continues this trend, of political and regulatory support for the business of carbon capture. As the UK edges closer to its own CCS plans, with final investment decisions (FIDs) imminent, it is clear the race is on.

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