Wednesday, January 26

The bill is out for the taxpayers

Many are asking the government to give more money for CO₂ capture in Oslo after the EU said no to providing such support. In that case, the cost framework approved by the Storting for Norwegian CO₂ management will be blown up.

As a parliamentary representative, Erna Solberg can quickly be asked to vote for far more state billions for Langskip than she as Prime Minister herself requested.

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The entire Langskip, the large Norwegian project for capture and storage of CO₂, was to cost NOK 25 billion.

Of this, it was intended that the state accounts for NOK 16.8 billion.

In the decision to the Storting from December last year, however, a buffer was added in case of exceedances.

The maximum limit for the state’s costs in the Storting’s decision was therefore NOK 19.2 billion.

Before the EU’s no last week to support a facility for CO₂ capture in Oslo, the state’s budget for Langskip was in danger of bursting.

Now the budget risks disaster.

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Crack becomes big hole

The first cracks are partly due to the fact that the CO₂ project at Norcem in Brevik has already increased the estimate for costs by almost NOK 1 billion.

And in part, it was all about a crack for the state at Klemetsrud in Oslo because the facility was not fully financed even with EU support. See table below.

Now that there is no EU money at all, the project in Oslo suddenly lacks several billion kroner in funding.

The state has to spend NOK 5.5 billion?

Several, such as MDG and SV, are now praying the government take more or all of the bill for Klemetsrud.

The state has already promised NOK 3 billion. But this has always been on the condition that the EU also provided support. The state’s promise applies until three months after the EU’s next award in the summer of 2022.

Without the EU, the state will probably have to increase support for the CO₂ plant in Oslo by around NOK 2.5 billion in addition to the aforementioned NOK 3 billion.

Thus, the state’s total bill for Klemetsrud could end up at least NOK 5.5 billion if it is to continue to be built without EU support.

Aftenposten / E24’s calculation assumes that the budget of NOK 7 billion is kept. And further that the state’s share will be about the same as for the other projects in Langskip. That is, somewhere between 75-85 percent.

The owners need to increase their contribution sharply?

In such a calculation, it is also assumed that the owners of the plant double their contribution from the current promise of NOK 800 million.

No one but the state and the owners can bear the cost of the plant when the EU said no. The owners must therefore turn up for the remaining amount that the state will not cover.

The owners are Oslo Municipality and the Finnish energy company Fortum. They own 50 percent each.

Fortum recently sold out of the waste company Stockholm Exergi. In contrast to Klemetsrud, this received EU support.

The Finns are therefore only left with Klemetsrud as their “lot” in European CO₂ capture.

At the moment there is a lottery ticket without a win.

Will try the EU again

Minister of Petroleum and Energy Marte Mjøs Persen (Labor Party) signaled to NRK on Tuesday that she wants Fortum Oslo Varme to apply to the EU for support once again.

The EU will also in the summer of 2022 distribute around NOK 10 billion to various innovative climate projects.

But if Fortum Oslo Varme has to wait for a new response from the EU, the whole project will now stop. They do not have the money to start up this year when the money from the EU was not forthcoming.

Persen does not want to answer whether the state can now provide any funding.

In order for there to be any point in applying again, the EU’s assessment of Klemetsrud should be positive despite the rejection now. Otherwise, the application can be thrown in the trash.

Norcem burst first

The government announced everything in its supplementary bill that the budget for investments at Norcem’s CO fang capture facility in Brevik has cracked.

It has increased by almost one billion kroner.

Thus, Norcem is far above the previously agreed level for maximum costs.

Both the state and Norcem can in theory therefore terminate the entire agreement between them.

But without Norcem’s facilities, no CO₂ will be shipped out into the North Sea in 2024.

– The parties are obliged to seek to find an agreed solution for the project. But neither party is obligated to cover costs over the maximum budget.

It is called from State Secretary Amund Vik (Labor) in the MPE.

Quickly rounds DKK 20 billion

In total, the state’s share of Langskip is now around NOK 20 billion. See the table above.

This is well above the original estimate of NOK 16.8 billion.

And that is also above the Storting’s budget decision of a maximum of NOK 19.2 billion.

It is still over three years until Norcem’s plant is in operation. This is followed by a period of ten years in which the state has promised to cover most of the costs of operation.

Good news from Northern Lights

It is nevertheless positive that the estimate for the transport and storage part of Langskip is still fixed.

This subproject is called Northern Lights. This constitutes by far the largest part of the costs for Langskip.

The EU’s allocation of funds to four European projects for CO2 capture is also very good news.

This greatly increases the chances that Northern Lights will have more customers than Norcem and Klemetsrud.

And it reduces the risk of the state cracking down on this part of Langskip as well.

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