OIL industry watchdog the Oil and Gas Authority (OGA) has awarded an Aberdeenshire company its first carbon dioxide (CO2) appraisal and storage licence as an independent regulator, for the development of the country’s first carbon capture and storage (CCS) project.

Banchory-based Pale Blue Dot Energy (PBD) won the licence for its Acorn CCS project, which aims to reuse existing oil and gas infrastructure to transport and store CO2 and to repurpose or rebuild an existing CO2 facility at the St Fergus gas terminal near Peterhead.

The “initial term” licence has been awarded to PBD for a four-year period and will allow the company to undertake offshore exploration to select a storage site.

Under the licence terms, the company will have to submit and be awarded a storage permit before carbon injection could begin. This permit also sets out the requirements the developer has to follow during operations.

The project is expected to capture around 200,000 tonnes of CO2 from the St Fergus terminal and transport it, using existing pipelines, for storage in one of three depleted North Sea gas fields.

OGA chief executive, Dr Andy Samuel, said: “The OGA fully supports the transition to a low carbon economy and can play a role in the transition.

“We undertake a wide range of activities which complement this, including licensing carbon capture usage and storage (CCUS) projects such as this.

“We welcome the Government’s recently announced action plan to develop the UK’s first carbon capture, usage and storage projects and are continuing our close working with the Government and others to identify existing UKCS infrastructure which could be re-used.” Samuel added: “We are also looking closely where else we can play a role, including the role of gas as a transition fuel; reducing emissions in flaring and venting; considering CO2 opportunities for EOR (enhanced oil recovery); and where suitable bringing attention to energy integration with renewables, including gas-to-wire.”

CCUS is the acronym for the several techniques and processes which capture CO2 emissions, usually from industrial operations.

The carbon is then transported, including through repurposed gas pipelines, and stored in areas such as underground locations within the rock formations below the Central North Sea.

PBD managing director, Alan James, who is also the Acorn CCS project leader, said it would put legacy assets to good use.

“Securing the CCS licence is a really important step to help us develop one of the UK’s first CO2 transportation and storage networks,” he said. “Through Acorn CCS, Scotland can use legacy oil and gas assets to deliver environmental benefits, unlocking CO2 transportation and storage solutions for other CCUS projects along the east coast of the UK.”

Experts have said that CSS technology is an important tool in tackling climate change, but Dr Richard Dixon, director of Friends of the Earth Scotland, believed the money could be better spent elsewhere.

“Instead of chasing the delusion that a CCS industry will get to commercial scale quickly and will allow the fossil fuel industry to go on indefinitely, governments should be planning for rapid but fair transition away from oil and gas,” he said.

“Spending our time and resources on renewable energy, energy efficiency and energy storage instead will deliver immediate reductions in carbon emissions.”

Dixon added: “There might be a role for CCS in relation to industry in the long term but with fossil fuelled cars being phased out and a crackdown on the mountains of plastic we use, even these sources of carbon will decline drastically in the coming decades.”