In 2019, a partnership between BP and German energy provider ENBW agreed to pay £231 million ($290 million) in annual option fees alone.
While the offshore wind industry booms, the Crown Estate is already eyeing the next opportunity to cash in on its seabed empire: carbon storage. The seabed around the UK has room to store 78 billion tons of carbon dioxide—more than enough space to cram in 200 years’ worth of the country’s annual emissions. Increasingly, the North Sea is being seen as a destination to store carbon captured from hard-to-decarbonize industries, including steel, cement, and fertilizer production.
“As the science on climate change has progressed, we’ve come to realize that just decarbonizing the power sector itself is not enough. We also need to reduce emissions and decarbonize other industries, other sources of emissions,” says Jonathan Pearce, carbon dioxide storage team leader at the British Geological Survey.
Although it’s still the heart of the UK’s fossil fuel industry, the North Sea may come to play an important part in the country’s decarbonization plans. In 2019 the Committee on Climate Change—a public body that advises the government—concluded that carbon capture and storage is a “necessity, not an option” if the UK is going to achieve its legally binding goal of reaching net zero greenhouse gas emissions by 2050.
But carbon storage plans have had a rocky start, says Esin Serin, a policy analyst at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. In 2011 and 2015 the government canceled major carbon capture and storage projects, attracting criticism from those who say the UK has been slow to capitalize on its natural storage assets. That is starting to change. The government’s pledge to hit net zero carbon emissions “was a turning point for carbon capture, usage, and storage,” says Serin.
The UK has set itself the target of capturing up to 30 million tons of carbon dioxide every year by 2030, with the first carbon capture clusters centering around industrial towns and cities in the northeast and northwest of England. “There’s now a real global competition for who’s going to reap the industrial and economic benefits from the world effort to try and get to net zero emissions,” Serin says.
All of that means the Crown Estate is now sitting on another valuable asset deep beneath the sea. The estate is responsible for granting the rights for carbon storage under the seabed around England, Wales, and Northern Ireland, as well as leases for pipelines that would transfer carbon dioxide to these underground stores, most of which are located in the North Sea. Storage licenses are approved by the North Sea Transition Authority (NSTA), a public body that regulates the oil, gas, and carbon storage industries in the North Sea.
So far, the NTSA has granted seven licenses for seabed carbon storage around England. One of those licenses—granted in 2013 to Shell—has expired, so there are now six active carbon storage licenses, covering five sites in the North Sea and one in the Irish Sea to the west of England. In September 2022, the NSTA closed bidding on the first public round of carbon storage licensing after receiving bids from 19 companies for the 13 carbon storage sites offered up. But any company that wants to transport and store carbon under the sea will also need to purchase rights from the Crown Estate. So far only one project holds an agreement for lease from the Crown Estate: a chunk of the North Sea being explored by a partnership between BP, Carbon Sentinel, and Equinor New Energy for its carbon storage potential.