The support is intended to finance a facility for capturing carbon dioxide, known as bio-CCS, which will provide negative emissions of 800,000 tons of the climate-hazardous gas per year.
The plan is to transport the carbon dioxide for final storage under the North Sea, with the intention of signing transport and storage agreements shortly. The next step in the process is an investment decision, which is expected to be made during the first quarter of the year.
This is a crucial piece of the puzzle for us to move forward, says CEO Anders Egelrud, adding that the investment is needed both to build up a Swedish industry for carbon capture and to achieve the European climate goals.
First Auction
The reverse auction is the first to be held. The system has taken a long time to get in place – including EU-level approval – and has been described as necessary for actors to dare to invest in the technology.
This was really what we needed to know as soon as possible. Now we can continue to handle the contracts we have already signed with large global companies that will account for more than two-thirds of the revenue for this project, says Egelrud.
"Faster on Track"
Six companies applied for the support when it was announced at the end of last summer.
It was only one company that could fully demonstrate in its implementation plan in a convincing manner that it had the capacity to deliver the captured emissions on time – and that there was a buyer for these emissions, says Martin Flack, acting head of department at the authority.
The funds will be paid out over a maximum of 15 years.
Stockholm Exergi has three years to start storing carbon dioxide (with the possibility of a two-year extension), after which the payments will begin.
If they are not up and running within three years, they have not lived up to the requirements in the procurement. And then we will not be able to continue paying out support, says Flack.
Remaining: 15 Billion
The authority has 15 billion kronor left to allocate. This will be done through a new auction planned to be announced this year. The funds can be used for investments or operating bio-CCS initiatives.
Over the past year, developments in the area have been slow. Several CCS and related CCU projects (where the captured carbon dioxide is used to create e-methanol, for example) in Sweden and globally have been put on hold.
Hopefully, several of them will come back, and they can see and learn from what we have done, says Egelrud.
The Energy Agency has granted Stockholm Exergi 20 billion kronor through a reverse auction.
The reverse auction means that the bidder who offered the lowest cost per ton for collecting, transporting, and storing biogenic carbon dioxide (bio-CCS) won.
In addition to Stockholm Exergi, Preem, Skellefteå Kraft, Svensk Kolinlagring, Olle Åkesson Enskild firma, and Öresundskraft applied for compensation, but only Stockholm Exergi met the requirements, according to the authority.
Source: Energy Agency
CCS stands for Carbon Capture and Storage, i.e., separation and storage of carbon dioxide. Often, "bio" is added as a prefix if the captured carbon dioxide comes from renewable sources.
The technology has been identified by the UN's climate panel IPCC as a crucial piece of the puzzle if the world's countries are to succeed in keeping the global temperature increase well below 2 degrees, alongside emission reductions.
CCU stands for Carbon Capture and Utilization, separation and utilization, and involves using the captured carbon dioxide as a raw material, for example, to produce methanol.
