Danish Shipping: Shipping industry’s investment in LCO2 transport hinges on market certainty

Shipping companies are ready to invest heavily in the construction of ships that can transport liquefied CO2, but they need more clarity that the market for their ships will be there once they are built.

This was the message from Danish Shipping, a trade and employer organisation for more than 90 shipowners and offshore companies, welcoming the move from the Danish government to provide state aid to expedite carbon capture and storage projects.

On Monday, the Danish Ministry of Climate and Energy said that the country would assign $3.9 billion (26.8 billion Danish crowns) for projects aimed at capturing and storing 2.3 million metric tons of carbon dioxide (CO2) emissions per year over the course of 15 years.

The new projects have to become operational in 2029.

Carbon capture and storage (CCS) has emerged as one of the key levers in helping countries decarbonize their energy sectors. Denmark has set a target of reaching net zero emissions in 2045 and by 2030 its CCS projects aim to cut at least 3.2 million tons of the country’s CO2 emissions.

Danish Shipping has several members for whom CCS is an interesting area. Total Energies and INEOS are ready to store CO2 underground, and several shipping companies are jumping to invest in ships that will be able to transport CO₂ from A to B, the organization said.

“The shipping companies are faced with some huge investments in the ships that can transport CO₂. They are ready to do that, but it requires clarity about the framework conditions and a certainty that there is a market on the day the ships are ready to be launched. In particular, the work to determine the transport of CO₂ across national borders is important, so we look forward to contributing to that,” says Jacob K. Clasen, Deputy Director General and Deputy CEO of Danish Shipping.

“We will not reach our ambitious climate goals without CCS. It is one of the many pieces of the puzzle that must come into play, so it is therefore extremely important that the government now comes up with a plan and creates clarity for the various players across the value chain, both on land and at sea.”

The organization further stressed the importance of the Danish government’s plans to enter into agreements with other countries, to enable Danish storage operators to get foreign CO2 in their storage facilities.

Clasen believes that Denmark’s underground storage capability represents a unique opportunity for the country to become a European center for the storage of CO₂.

“To be able to seize that opportunity, however, it is a prerequisite that agreements are put in place with our neighboring countries, so it is good to see that the government is on the ball here,” he added.

The liquefied carbon dioxide (LCO2) carrier construction market is still in its infancy, but recent developments underscore its growing significance in addressing CCUS challenges. A prominent milestone in this progression is the joint venture known as Northern Lights, consisting of industry leaders Shell, Equinor, and TotalEnergies.

This collaboration took a monumental step forward with the recent keel-laying ceremony for two groundbreaking vessels that marry LNG-powered technology with wind assistance for the transportation of LCO2.

The duo is intended for the transport of liquefied CO2 in purpose-built cargo tanks from industrial emitters in Norway and Europe to the onshore receiving facilities in Øygarden, Norway.

Source: World Maritime News