The recent Riviera CO2 Shipping and Terminals conference gathered together a number of experts to consider CO2 shipping. It is clear that there is enormous enthusiasm for using shipping as a transportation solution to integrate into carbon capture and storage projects, particularly given the flexibility it offers to move captured carbon to stores from a variety of different locations.
However it is not smooth sailing ahead.
Some of the key challenges that the industry faces relate to how the cross-border shipment of CO2 will be regulated. Norton Rose Fulbright's Alistair Black flagged the need for alignment and mutual recognition between the EU and UK to facilitate CO2 shipping and storage between the two – particularly in the context of EU ETS recognition. Clarity on how the UK government will support carbon capture and storage in the UK and whether project standards can be introduced to give certainty to the parties involved in the industry are much needed. Although the UK elections on the 4 July have delayed government progress on this, there is optimism that carbon capture and storage will remain high on the agenda for whichever party wins next month. There are also decisions to be made on Liquefied CO₂ vessels which are on order or which will need to be ordered, and in particular on choice of fuel to ensure regulatory requirements on emissions, such as Carbon Intensity Indicator (CII), are met longer term.
On board carbon capture and storage also featured heavily at the conference, with some speakers seeing it as a key way to reduce vessel emissions. Financing on board carbon capture was seen as attractive to banks, although there may be issues with structuring this where the equipment is retrofitted to a financed vessel. We have discussed some of the options in relation to this in our article Financing onboard carbon capture: What are the options?
Whilst there is much work ahead to agree the framework and standardisations needed to make the industry as effective and efficient as possible, much of this in underway and the future looks very bright for CO2 shipping.
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