Global energy consultancy Xodus has delivered a review of the project concept, cost estimates and the economic models to enable large-scale CO2-reduction for industrial clusters in the Netherlands.

The work for the Dutch Ministry of Economic Affairs and Climate Policy focused on the Aramis Carbon Capture and Storage (CCS) project which will capture, transport and store CO2 from both gaseous and shipped emitters through an open access transport system. This is the second landmark CCS tariff review that Xodus has delivered, following a review into tariffs for the Porthos project in 2020.

Xodus’ report on Aramis will provide guidance to the Dutch Ministry on the project’s requested subsidy for funding through the government’s latest SDE++ round. The Netherlands has climate objectives to reduce greenhouse gases by 49% in 2030 and 95% in 2050 compared with 1990 levels.

The Aramis CCS project is a partnership between TotalEnergies, Shell, EBN and Gasunie to develop a backbone transport and storage system to bring captured CO2 from emission sources to offshore storage sites. The project differs from the Porthos project, which is led by privately owned companies in TotalEnergies and Shell.

The Aramis project aims to contribute to the reduction of emissions by providing CO2 transport to unlock storage capacity for industries such as the steel, chemicals, cement, refineries, and waste incinerators. It will offer a decarbonisation solution for the industrial sectors by transporting CO2 to depleted offshore gas fields under the Dutch North Sea. This will be based on an ‘open access’ philosophy to give industrial customers and offshore storage providers the possibility to connect to the infrastructure at a later stage.

Aramis is currently in concept select phase with this due to be completed this summer with a final investment decision by 2025 and an operational start-up in 2027. The project aims to make an important contribution to the CO2 reduction targets for 2030, as laid down in the Dutch National Climate Agreement and the European Union’s Green Deal.

Jonathan Fuller, Global Head of Advisory and Energy Transition at Xodus said: “Aramis has the potential to make a significant contribution in helping the Netherlands reach its carbon reduction targets. This review builds on the work we completed for the Porthos project two years ago when our input was integral in ensuring the development was successful in qualifying for €2.1 billion of SDE++ support.

“The Aramis project is unique in combining multiple sources of emissions from gaseous and shipped emitters, whilst pre-investing in the transport system to enable future emitters and storage sites to connect to the infrastructure through an open access concept. This pre-investment in the infrastructure can provide the backbone to support wider build out of CCS projects in Europe and deliver on the decarbonisation objectives set out by the Netherlands and in the EU.”

Counties across Europe are taking differing approaches to encourage early-stage CCS investment.

Mr Fuller added: “If we look at the different approaches taken by different European countries, we do see subtly different tactics to encourage investment in these first of its kind CCS projects. Norway and The Netherlands have provided certainty to emitters and transport and storage companies through proposing minimum CO2 prices in 2030 of 200 Euro/tonne (Norway) and 125 euro/tonne (Netherlands), thereby creating a carbon price floor that can support CCS investments.

“The UK considers only Emissions Trading Scheme (ETS) prices, which has been relatively volatile. This gives less certainty to investors; however, it lowers the risk that a government is accused of allowing early investors to make excess profits. The UK mechanisms to support CCS are similar in mechanics to offshore wind whereby a contract for difference CO2 price will underpin the emitter costs and a regulated asset base (RAB) business model for transport and storage.

“Only time will tell which approaches have provided the best balance in terms of encouraging a new CCS value chain, at a sensible level of government and ultimately tax-payer support.”

The full report can be viewed here.