A Norwegian project aimed at storing millions of tonnes of carbon emissions under the North Sea came to a green light on Thursday (September 5) when some of Europe’s largest industrial players signed preliminary agreements.

At a high-level conference on carbon capture and storage technology (CCS), co-organized by the Government of Norway and the European Commission (EC), seven companies, including metal producer ArcelorMittal and Heidelberg Cement, supported the Northern Lights project.

The plan of state-owned Norwegian giant Equinor (formerly Statoil) and its partners Shell and Total, aims to make it the “world’s first transboundary carbon dioxide storage facility”, says the CEO of Equinor, Eldar Saetre.

With still fresh ink on the pages of the Memorandum of Understanding, the CCS project team hopes to persuade governments to invest in the plan and allow it to grow to commercial scale. Scalability has proven to be an insurmountable obstacle for other carbon capture and storage companies, and other donor financial flows such as the European Union (EU) have proven difficult to secure or fully utilize.

The Norwegian Government, for its part, acknowledged the importance of the industry’s commitment. The Petroleum and Energy Minister Kjell-Borge Freiberg told reporters that “this is the right step in that direction”. During the conference, he stated that CCS will be essential to the labor market in the coming years and is “needed to keep jobs in a low-emission society”. However, he added that the plan would still face financial, legal and social challenges.

CCS is by no means cheap. Estimates in 2016 indicate that the creation of the full-scale chain will require at least 1 billion EUR. If everything goes according to plan, the project can be developed by 2024. At present, the cost of reducing emissions is up to 100 EUR per tonne, while the EU’s ETS has been able to increase the carbon price to around 25 EUR. This gap turns out to be difficult to overcome.

The Northern Lights project involves capturing carbon emissions at source – from industrial installations such as steel and cement plants, transporting them by ship to offshore sites and storing them below the seabed.

As Equinor prepares for the emission storage part, it looks at the places that might best serve this task.

Norway is not the only country considering making the North Sea a carbon storage center. The CEO of Port of Rotterdam, Allard Castelein. explained that the Netherlands developing the Portos project does not see Equinor as a competitor.

“We do not want to conquer the world, as we have tried in the Middle Ages. There’s so much carbon to capture”, said Allard Castelein during the conference. Equinor hopes to capture 5 million tonnes of emissions, while the Rotterdam project can absorb 10 million tonnes of carbon dioxide

Portos largely has the same characteristics as the Northern Lights, as it envisages capturing emissions from the vast array of industrial sites collected around Europe’s largest port, which will be stored in old gas fields. However, the Dutch project differs in that it will use a pipeline to transport emissions. It will also redistribute part of the greenhouse gas emissions, which should stimulate plant growth.

Allard Castelein said the plan for Portos was to connect the system to Belgium, and perhaps even to Germany.

The EU has recently confirmed that CCS will be needed for the bloc to meet its climate targets, and in particular to achieve carbon neutrality by 2050.

Тхе EU Commissioner for Energy and Climate Action Miguel Arias Canete told the Oslo conference that CCS was a “realistic solution” for the steel and cement industries, reiterating that the EU’s executive is committed to financing innovative technologies.

Christian Holzleitner, an EC official, explained that one of the goals of the fund is to “make you invest now. Not in ten years”. In addition to supporting the technology itself, funding can be used to cover operating costs. He added that the Commission had learned lessons from its previous NER300 fund, which failed to provide money to any of its future applicants. EU auditors concluded last year that they have largely failed to meet their targets.

But the NER300 looks almost exclusively at the cost of reducing projects, while the Innovation Fund will analyze five criteria that cover a wider range of factors. The call for applications will start next year.

The European Investment Bank (EIB) is also involved in the project. Vice President Andrew McDowell said the credit institution has identified CCS as a priority and will be “an essential part of our business”. He warned that the road would not be easy, as projects would still have to deal with the issue of long-term liability and leakage insurance.

The EIB is currently updating its energy policy and the draft proposal proposes to remove all funding for fossil fuel projects. The plan also proposes that poorer EU countries be afforded higher levels of funding.

Shareholders are meeting next week to discuss the project, with a final decision expected in October.