Denmark – In a pivotal moment for Denmark’s ambitions in carbon capture and storage (CCS), the second tender round for offshore licenses aimed at exploring and utilizing the subsoil for geological CO2 storage in the North Sea faces an unexpected postponement.
Originally scheduled to start on August 15th, 2023, the eagerly anticipated tender has been halted pending a decision that could reshape the landscape of state involvement in future licenses.
The foundations for the tender system were set in motion by the executive order on CO2 storage license tenders, a legislative move designed to establish a structured approach to CCS exploration and utilization. According to this order, offshore license applications are to be accepted annually on August 15th, with the submission window closing on October 1st of the same year. The first iteration of this tender process was launched on August 15th, 2022.
State participation share
However, Denmark’s journey into the CCS landscape is encountering a crossroads. In the wake of the Agreement on the framework for CO2 storage in Denmark, signed on June 21st, 2022, parties to this accord face a crucial decision. This agreement, which advances the nation’s CCS strategy, necessitates a deliberation on whether the state participation share in upcoming licenses should be elevated beyond the parameters established after the initial tender round.
As a consequence of these discussions, the second tender round for offshore licenses has been put on hold. The timing of this delay aligns with the need for clarity and consensus on the matter of state involvement in future licenses. This decision, while causing a pause in the tender process, underscores the strategic and critical nature of state participation in CCS ventures.
Path forward
Looking ahead, the Danish Energy Agency, entrusted with shepherding the country’s energy endeavors, anticipates that a new commencement date for the second tender round will be confirmed later in 2023. This delay serves as a testament to the complexities of merging environmental ambitions with economic and strategic considerations.
The tender process itself is a crucial element of Denmark’s pursuit of effective and responsible carbon storage. The inaugural tender round, which unfolded on August 15th, 2022, yielded the allocation of three licenses. These licenses reflect the nation’s tangible progress in aligning with carbon capture objectives.
It’s important to clarify that the deferment specifically pertains to offshore licenses within Denmark’s part of the North Sea. Ongoing licenses and imminent onshore tender rounds remain unaffected by this decision.
