Ørsted signs Equinor carbon removal deal, funds BECCS hub

Ørsted, a Denmark-based renewable energy company, will sell carbon credits worth 330,000 tonnes of CO2 to Norwegian petroleum refining company, Equinor, in a new 10-year deal to help finance its incoming biomass-based carbon capture and storage project.

The Equinor deal comes alongside the company’s “realisation… biomass-based carbon capture and storage is still at an early stage of development and associated with high costs,” according to a release posted to its website.

It said the sale of carbon dioxide removal (CDR) credits, and support from the Danish Energy Agency, have been “crucial” to financing its Kalundborg CO2 Hub.

“Equinor shares Ørsted’s commitment to maturing carbon capture and storage technologies. We already have a partnership with Equinor and Nordsøfonden (Danish-state subsurface resource company) 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, head of Ørsted’s bioenergy business, in the release.

The Hub, slated to open in 2026, is expected to capture 430,000 tonnes of biogenic CO2 annually from two of Ørsted’s biomass-fired combined heat and power plants.

Ørsted is a major consumer of Canadian wood pellets. The two plants linked to the Hub are Ørsted’s wood chip-fired Asnæs Power Station in Kalundborg, western Zealand, and its Avedøre Power Station’s straw-fired boiler in the Greater Copenhagen area.

The CO2 captured will come from sustainable biomass and will be permanently stored under the North Sea seabed. In this way, CO2 will be removed from the atmosphere and is expected to contribute to negative emissions.

The company has launched similar deals with major carbon emission contributors in the past, including tech giant Microsoft.

Equinor is looking to reduce its net scope 1 and 2 greenhouse gas emissions by 50% by the end of 2030, compared to 2015 levels. A maximum of 10% can come from CDR credits, the remainder has to come from must absolute reductions.

“We’re very pleased to expand our cooperation with Ørsted to also include CDR credits,” said Svein Skeie, senior VP of business development at Equinor.

“We both share the belief that building markets enabling the physical reduction and removal of carbon will play a role in reducing emissions.”

Ørsted’s partner Northern Lights, which is responsible for storing CO2 in the subsurface, is also owned by Equinor, among others.

“Developing large-scale CO₂ solutions is critical for hard-to-abate industries to reduce emissions while maintaining industrial activity and value creation,”  said Grete Tveit, senior VP for low-carbon solutions at Equinor, in a release by Equinor.

“Our first important task in the project is to ensure that environmental requirements are met before seismic and subsurface data collection can start. The exploration phase will last several years, before the Danish authorities approves the licence area as suitable for safe and permanent CO₂ storage.”