Policy Statement on Leasing Carbon Dioxide Storage Sites

The Crown Estate plays an important role in the development of the UK’s renewable energy resources as the owner of the UK seabed out to the 12 nautical miles territorial sea limit, with rights under the Energy Act 2004 in the Renewable Energy Zone (REZ) on the UK’s continental shelf out to 200 nautical miles. On 6 April 2009, this role was extended under the Energy Act 2008 to allow the offshore area to be used for methane gas and carbon dioxide storage.

In order to undertake storage of carbon dioxide in the UK offshore it will be necessary for a developer to obtain permission from The Crown Estate to use the relevant area of the seabed as well as a DECC / Scottish Government permit for the storage of the carbon dioxide.

In developing the detailed implementation arrangements The Crown Estate will be working with all stakeholders including government departments, developers and utilities, in realising the UK Government’s targets for renewable energy and reducing carbon emissions. We recognise that successfully developing geological features within UK waters will be crucial to enabling carbon capture and storage (CCS) technology and increasing the amount of CO₂ storage in the UK.

It should be noted from the outset, that any such rights granted by The Crown Estate will be conditional upon an applicant obtaining a suitable carbon storage permit from DECC or the Scottish Government in relation to Scottish territorial waters around Scotland.

Whilst we wish to facilitate the establishment of offshore carbon storage facilities and the timely development of the CCS industry, the arrangements for permits are still being developed and will need to incorporate the requirements of the carbon dioxide storage directive agreed at the end of last year. This places a practical limit on our ability to proceed with granting rights.

Nonetheless, given the importance of CCS in assisting the UK to meet its environmental obligations, we intend to proceed with the process of granting relevant rights in connection with carbon storage where and to the extent that we can. Any allocation of property rights will be conditional on environmental consents. We will operate in a fair, open and transparent manner at all times.

We therefore expect to announce further information on the timing and detail of this process in the future but we expect the process to include expressions of interest from existing hydrocarbon rights holders followed by separate arrangements for allocating sites not covered by hydrocarbon rights.

DECC Competition & EERP Funding

The Crown Estate has clarified some issues that relate to the CCS funding competitions being led by the Department for Energy and Climate Change (DECC) and the European Commission.

As a result we intend to award an exclusive lease option to the winner of the current DECC CCS competition.

In addition, we will award a lease option to any recipient of the European Economic Recovery Plan (EERP) funding for CCS.

The award of a lease option to these projects will be subject to the protection of pre-existing rights and will be subject to receiving the necessary permits from DECC together with any other relevant consents or approvals.

For any additional information on the above contact:

   Head of External Relations: Dermot Grimson

   Development Manager (CCS & Gas Storage): Jason Golder

   Commercial Manger: Paul Sharp

This information is updated on a regular basis so please visit again to check for updates from time to time.