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Developing a Pilot Case aimed at establishing a European infrastructure project for CO2 transport

Periodic Reporting for period 2 - GATEWAY (Developing a Pilot Case aimed at establishing a European infrastructure project for CO2 transport)

Reporting period: 2016-11-01 to 2017-04-30

The EU has set itself a long-term goal of reducing greenhouse gas (GHG) emissions by 80-95% by 2050 when compared to 1990 levels. In December 2015, at the United Nations Climate Change Conference (COP 21), the Paris Agreement was adopted, whereby Parties agreed to ""pursue efforts"" to limit global temperature increase caused by human-induced climate change to 1.5°C. The agreement calls for zero net anthropogenic GHG emissions to be reached during the 2nd half of the 21st century. At the same time, the demonstration of carbon capture and storage (CCS) technologies, highlighted to be an indispensable mitigation technology by the vast majority of global climate models, is losing traction, especially in Europe. Although a full chain has yet to be demonstrated in Europe, CCS technology is available and could be applied in power generation sector as well as in industrial sectors, but so far there has been no viable business case to facilitate deployment.

The 2-year H2020 project GATEWAY, (May 2015-May 2017), aims to accelerate the deployment of CCS, notably by developing a model Pilot Case aimed at commencing an initial cross-border gateway connecting available CO2 sources and possible sinks. The phases of the GATEWAY project can be found in Figure 1.

1. Define a Pilot Case, providing a model for establishing a European CO2 infrastructure project, targeting a cross-border gateway transferring CO2 from source to sink.
2. Define a subsequent EU CO2 Project of Common Interest (PCI), which if selected, can benefit from accelerated permitting procedures and improved regulatory conditions, and may be eligible for financial support from the Connecting Europe Facility.
3. Align the stakeholder's interests and engage Member States.
4. Develop a business case for the Pilot Case project by addressing the risks and proposing measures for de-risking as well as assessing the technologies, policy and regulatory aspects, public perception, funding needs and proposing possible financing mechanisms.

The GATEWAY project has been able to go beyond its initial expected objectives, by not only developing a business case for a potential PCI project, but also by generating sufficient industrial and government support to enable the actual submission of PCI application to the EC in April 2017. The learnings generated through the development of the chosen Pilot Case, the Rotterdam Nucleus, including the societal, legal and technical work completed around the case, have led to the compilation of 33 recommendations which can be used in the development of future CO2 transport PCIs (see Figure 2)."
In the 1st reporting period (RP), a Pilot Case for a potential European PCI was chosen. The selection of the pilot case was preceded by an evaluation of 4 potential pilot cases, with locations ranging from Germany, Norway and the UK. The multi-criteria analysis of the 4 potential pilot cases, included assessing the pilot cases against a number of quantitative and qualitative criteria (including the PCI criteria). Other criteria included transport distance, investment cost, cost per ton CO2 transported, expected public acceptability, existence of industrial and governmental support and CO2 mitigation potential. Based on the outcomes of this assessment, it was decided to pursue 'Rotterdam Nucleus' as our Pilot Case. The ‘North Sea sub-seabed strategic regional plan on CCS transport infrastructure’ from February 2017 (NSBTF, 2017), highlights a number of potential Project of Common Interest concepts, which it describes as “sensible locations for initial infrastructure development”. The development of a CO2 hub at the Port of Rotterdam is one of the showcased concepts.

In the 2nd (and last) RP, the Rotterdam Nucleus Pilot Case was refined and developed. Work in the GATEWAY project involved the identification of key technologies, assessment of relevant legal frameworks, statutes and viable ownership arrangements, a design for the assessment of local public perception, and the identification of possible funding sources. This portfolio of work fed into the proposal for a PCI, which included a prospectus for a PCI business case. As part of this work, a cost-benefit analysis was also performed. Through multiple GATEWAY stakeholder events, it became evident that sufficient traction from industrial and governmental representatives existed to support the project to actually submit the Rotterdam Nucleus business case as a PCI.

In March 2017, the Port of Rotterdam Authority offered to adopt the Rotterdam Nucleus PCI business case and become the official ‘Project Promoter’ for a PCI submission. The PCI submission also benefitted from encouragement from the Dutch Ministry of Economic Affairs, the UK Department for Business, Energy and Industrial Strategy, as well as several affiliated applicants from the UK and Dutch private sectors. GATEWAY has hereby played a pivotal role in launching one of the first PCI applications with a defined business case, clear ownership and backing from multiple stakeholders.

The Rotterdam Nucleus project will provide the foundations for a high-volume CO2 transportation infrastructure system from mainland Europe to CO2 storage locations in the Dutch and UK sections of the North Sea. The infrastructure is designed to be over-sized, capable of providing CO2 transport capacity for pre-commercial and commercial phase CCS deployment in Rotterdam, as well as possible future links to industrial areas of third-party countries. A simplified outline of the two segments of the pipeline structure can be seen in Figure 3.
The Rotterdam Nucleus PCI of GATEWAY has the opportunity to become one of the first CO2 transportations projects on the PCI list. The Rotterdam Nucleus PCI proposal is unique in the sense that in addition to providing CO2 transport services to onshore energy and industrial emitters, it facilitates the development of stranded gas fields (due to high CO2 content in field gas) by allowing gas production to commence and the separated CO2 to be permanently, geologically stored. This dual-purpose function of the infrastructure represents an important potential value that can lower the overall implementation costs of the infrastructure. Unlocking the value of stranded natural gas reserves can support energy security in the EU, helping lowering the costs of CCS deployment, and in turn facilitate low-carbon industrial development in key industrial clusters.

More specifically:
- The Rotterdam Nucleus project has the potential to transport 114 MtCO2 cumulatively over the 20-year assessment period, with a monetary reduction in carbon damages totalling €6.84 billion (undiscounted).
- The project supports security of supply by enabling a maintained diversification of power supply while reducing the climate impact of doing so.
- This project connects the first European onshore capture cluster to the first offshore storage cluster.
- The so-called 'main spine' pipeline is deliberately over-sized to create future expansion potential to increased diversity of sources and storage locations in the Southern North Sea.
- The reuse of existing offshore natural gas production assets for CO2 storage as part of the Rotterdam Nucleus project can result in an economic saving of €85 million, compared to the installation of new infrastructure.
Figure 1: A simplified outline of the PCI structure
Figure 3: Concrete recommendations from the GATEWAY project
Figure 4: Photocollage from GATEWAY stakeholder events
Figure 2: GATEWAY phases