NSTA launches second round of carbon storage licences

THE NORTH SEA TRANSITION AUTHORITY (NSTA) has opened a second licensing round for carbon storage, which could add up to 2bn t of CO2 storage capacity to the UK.

Following what the regulator described as “extensive consultation” with the Crown Estate and Crown Estate Scotland, 14 areas are being made available: five in Scottish waters and nine off the coast of England.

In 2023, the NSTA awarded 21 licences. Those projects collectively have the potential to store up to 30m t/y of CO2 by 2030, equivalent to around 10% of the UK’s annual emissions.

That initial round included major UK low-carbon projects such as Endurance, offshore Teesside and the HyNet North West project, each with storage capacity of up to 200m t of CO2.

Capacity and policy support

The UK government has prioritised carbon capture, usage and storage (CCUS) as a “pivotal” technology for decarbonisation. Ministers have committed £21.7bn (US$29bn) of public funding over the next 25 years, focused primarily on the northwest and northeast of England.

According to the NSTA, CCUS could deliver around 30% of the emissions reductions required for the UK to meet its net zero by 2050 target. Meanwhile, the British Geological Survey estimates that the UK continental shelf could theoretically store up to 78bn t of CO2.

UK CCUS pipeline

There are now more than 100 projects in UK’s CO2 capture pipeline at varying stages of development. Three projects – Net Zero Teesside Power, Padeswood CCS and Protos Energy Recovery Facility – have reached the final investment decision (FID) stage.

However, progress across the sector has slowed since 2023. Data from the Carbon Capture & Storage Association’s (CCSA) CCUS Delivery Plan Update 2025 shows that 27 UK capture projects have been cancelled, with around 15m t/y of planned capture capacity lost from the pipeline.

Following surveys of industry and project developers, the CCSA has called for a more streamlined regulatory approach and greater policy clarity from government.

The association welcomed the launch of the second licensing round, considering it a “crucial step” for CCUS in the UK.

Mark Sommerfeld, UK director of the CCSA, said: “Our Delivery Plan highlights the urgent need for both additional CO2 storage capacity, which will be delivered by this new round, while also ensuring that existing licensed projects are given a clear route to market to complete the development of their stores.”

The second licensing round will remain open until 24 March 2026, with licence awards expected to be made in 2027.