In 2019, a partnership between BP and German energy supplier ENBW agreed to pay £231 million ($290 million) in annual option fees alone.
As the offshore wind industry booms, the Crown Estate is already looking at the next opportunity to monetize its seabed empire: carbon storage. The seabed around the UK has room to store 78 billion tonnes of carbon dioxide – more than enough room to cram the country’s annual emissions over 200 years. The North Sea is increasingly seen as a destination to store carbon captured from hard-to-decarbonise industries, including steel, cement and fertilizer production.
“As science on climate change has progressed, we have come to realize that simply decarbonising the energy sector itself is not enough. We also need to reduce emissions and decarbonize other industries, other sources of emissions,” said Jonathan Pearce, carbon sequestration team leader at the British Geological Survey.
While still the heart of the UK’s fossil fuel industry, the North Sea could play an important role in the country’s decarbonisation plans. In 2019, the Climate Change Commission – a government agency that advises the government – concluded that carbon capture and storage is a “necessity, not an option” if the UK is to meet its legally binding target of net zero greenhouse gas emissions by 2050.
But carbon storage plans have had a rocky start, says Esin Serin, a policy analyst at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. In 2011 and 2015 the government canceled major carbon capture and storage projects, drawing criticism from those who say the UK has been slow to capitalize on its natural storage resources. That is starting to change. The government’s commitment to achieving net zero carbon emissions “was a turning point for carbon capture, utilization and storage,” says Serin.
The UK has set itself the target of capturing up to 30 million tonnes of carbon dioxide each year by 2030, with the first carbon capture clusters concentrated around industrial towns in the North East and North West of England. “There is now a real global competition over who is going to reap the industrial and economic benefits of the global effort to try to achieve net zero emissions,” says Serin.
All that means the Crown Estate is now sitting on another valuable asset deep under the sea. The estate is responsible for granting the rights for undersea carbon storage around England, Wales and Northern Ireland, as well as leases for pipelines that would transfer carbon dioxide to these underground storages, most of which are in the North Sea. Storage permits are approved by the North Sea Transition Authority (NSTA), a government agency that oversees the oil, gas and carbon storage industries in the North Sea.
So far, the NTSA has issued seven permits for seafloor carbon storage around England. One of those licences, which was granted to Shell in 2013, has expired, so there are now six activated carbon storage licences, covering five sites in the North Sea and one in the Irish Sea west of England. In September 2022, the NSTA closed the bid for the first public carbon storage licensing round after receiving bids from 19 companies for the 13 carbon storage sites on offer. But any company that wants to transport and store carbon under the sea will also have to buy rights from the Crown Estate. So far, only one project has a lease from the Crown Estate: part of the North Sea is being explored through a partnership between BP, Carbon Sentinel and Equinor New Energy for its potential for carbon storage.
