In a new agreement, Denmark-headed energy utility major Ørsted A/S will sell carbon dioxide removal credits amounting to 330,000 tonnes of carbon dioxide to Norway-headed energy major Equinor ASA over a ten-year period.
This is part of Ørsted’s carbon capture and storage (CCS)project, ‘Ørsted Kalundborg CO2 Hub’, which will capture 430,000 tonnes of biogenic carbon dioxide (CO2) annually from two of Ørsted’s biomass-fired combined heat and power (CHP) plants from 2026.
The CO2 that is captured comes from sustainable biomass and will be permanently stored under the North Sea seabed. In this way, CO2 will be removed from the atmosphere and contribute to negative emissions.
Revenue from CDR credits
According to Ørsted, the sale of Carbon Dioxide Removal (CDR) credits contributes to the realization of the ‘Ørsted Kalundborg CO2 Hub’, as bioenergy with carbon capture and storage (BECCS) is still at an early stage of development and associated with high costs.
The sale of CDR credits and support from the Danish Energy Agency (DEA) have therefore been crucial to the financing of the project.
Contributing to a functioning voluntary carbon market, as exemplified by this agreement, is part of Equinor’s strategy to reduce its net Scope 1 and 2 greenhouse gas (GHG) emissions by 50 percent by the end of 2030 compared to 2015 levels.
A maximum of 10 percent of this target may be achieved through CDR credits, and at least 90 percent of this target must be achieved through absolute reductions.
Equinor shares Ørsted’s commitment to maturing carbon capture and storage technologies. We already have a partnership with Equinor and Nordsøfonden to explore the possibility of storing CO2 in the subsurface, and we’re pleased to expand the collaboration through this agreement on the sale of CDR credits, said Ole Thomsen, SVP and Head of Ørsted’s Bioenergy business.
Ørsted’s partner Northern Lights, which is responsible for storing CO2 in the subsurface, is also owned by Equinor, among others.
We’re very pleased to expand our cooperation with Ørsted to also include CDR credits. We both share the belief that building markets enabling the physical reduction and removal of carbon will play a role in reducing emissions, said Svein Skeie, SVP of Strategy and Business Development at Equinor.
