France strikes CO2 storage deal with Denmark

France signed a bilateral agreement with Denmark on Monday (4 March) for carbon transport and storage, with more deals potentially yet to come, as part of efforts to meet its domestic carbon targets.
To meet the European target of reducing greenhouse gas emissions by 55% by 2030 compared to 1990 levels, “it will be necessary to use carbon capture for technologies […] for which there is no low-carbon alternative”, the cabinet of Roland Lescure, minister for industry and energy, said on Monday.

The transport project will be carried out via a branch of the Dartagnan carboduc (carbon pipeline) developed by the French gas transporter GRTgaz, which will transfer gas from the French to Norwegian coast, passing through Dutch and Belgian ports. However, the first capacities sent to Denmark could be by boat, not by this pipeline, according to Lescure’s office.

Today’s signature “will make it possible, in practical legal terms, to export CO2 from France to Denmark as early as this year”, Lescure’s office said. The agreement was struck on the sidelines of a meeting of EU energy ministers, composed of two documents.

The first was a letter of intent to establish a political cooperation agreement. The second was a bilateral agreement, compulsory under the London Convention, which sets out the rules for transporting and storing carbon.

The move will contribute to France’s target of storing more than 8 million tonnes of carbon by 2030 and 20 million tonnes by 2050. The EU target for 2030 is 50 million tonnes.

In parallel with the Norwegian project
With targets like these, Danish capacity alone will not be enough. In mid-January, the Minister signed a separate letter of intent with his Norwegian counterpart. In October 2023, Lescure travelled to Norway to visit the Northern Light site – a joint venture between the oil and gas companies TotalEnergies, Equinor and Shell – which offers carbon storage in former offshore oil caverns in the North Sea.

Northern Light’s storage capacity is not yet operational, but it will eventually be possible to store 1.5 million tonnes of CO2 in 2024, rising to 5 million tonnes in 2026. Two French industrial sites, located in the Pas-de-Calais region, have already been contracted to use this capacity.

Waiting for Commission approval
To maximise its ability to transport and store its carbon, French industry is pushing the government to sign contracts with other EU countries. The Netherlands and Italy, in particular, are said to have capacity for resale – but Lescure’s office has said that no agreement is in sight for the time being. To make the contractual process smoother, Lescure’s office said that France has been fighting to review the existing framework of the London Convention.

The rules on contracts for carbon capture and storage currently require bilateral agreements to be signed. For several months now, France has been calling for mutual membership of the EU or the European Economic Area (EEA) to be able to serve as a tacit agreement. But for the moment, “the European Commission is taking ages to get back to us”, the cabinet added bluntly.

“We’ve been waiting several months for a legal opinion on the matter […]. We are confident, however, that the Commission will soon give us a positive opinion,” he added.

The cabinet said that the government also hopes to receive authorisation from the Commission within the next six months for the introduction of support mechanisms for manufacturers involved in carbon capture, through so-called “carbon contracts for difference” governed by EU state aid rules.

Those contracts allow manufacturers to make up the difference between the market price per tonne of CO2 and the cost of avoiding carbon emissions by decarbonising their activities.

Meanwhile, France still has no definitive strategy for capturing, storing and using carbon and no date on the horizon. However, the firm points out that it is currently awaiting feedback from the energy regulator committee.