What we do

In addition to regulatory permission from the Government, developers require a lease from us to use the seabed for CO2 storage.

An AfL provides the time and rights for developers to obtain a licence from DECC, appraise the prospective storage site and develop the detailed storage plan to underpin a permit application. The lease itself provides the rights to install, commission, operate and maintain storage infrastructure, and store CO2 permanently in the permitted storage site. It also provides the time for the tenant to carry out closure, decommissioning and post closure monitoring obligations.

The Crown Estate's revised policy on granting of rights

The Crown Estate's previous policy has been to grant an AfL in respect of a particular area of the continental shelf to applicants that have been successful in securing funding for a project in that area from certain specified EU or UK competitions.

The Crown Estate has revised its policy and it is now willing to consider grants of AfLs to all applicants who haveapplied for(but have not necessarily yet won) funding from UK and EU competitions, whether or not currently in existence, conducted by public authorities for the purposes of providing financial assistance to carbon capture and storage projects, including part chain projects such as storage site exploration, appraisal and development.  Competitions currently meeting this condition include the European Energy Programme for Recovery (EEPR), phases 1 and 2 of the New Entrant Reserve (NER300) programme, and the forthcoming Department of Energy and Climate Change competition to support the UK's CCS delivery programme.

The Crown Estate will publicly advertise proposals to grant AfLs for a two month period on its website and in the newsletter of the Carbon Capture and Storage Association.  This process will give people notice that The Crown Estate intends to allocate an AfL to the site and therefore that the site will no longer be available to subsequent applicants. The [advertisement/notice] will invite comments from interested parties. The Crown Estate believes that this change in policy could further speed up the development of carbon storage projects - as it should allow carbon storage businesses and petroleum licence holders to start negotiating the terms of the co-existence on the continental shelf at an earlier point in time.

The alteration in policy raises the possibility that multiple persons could submit applications for an AfL in respect of the same area of the continental shelf or that third parties could raise objections to the proposed grant of an AfL.

If there were multiple valid applications or valid objections, then The Crown Estate reserves its right not to grant an AfL to any applicant, depending on the circumstances of each particular case.. The applicants will still be able to enter funding competitions and develop their storage proposal according to the relevant competition timetable.  In such situations The Crown Estate will only grant an AfL once the authority conducting the competition makes a funding award decision.

The policy that we have outlined should be viewed as a temporary one, which will be reviewed in 6 months by The Crown Estate, in light of experience. This will give The Crown Estate the opportunity to test out the policy alongside the evolving funding streams and new UK competition process.

We are keen to support the development of CO2 storage projects, and understand that it may be necessary for a developer applying for EU or UK funding to demonstrate how they will obtain the necessary rights to store CO2 at a specific site. Where appropriate, we can also support such applications by setting out the process by which we will grant storage rights in a letter that can be submitted as part of a prospective developer's application for funding.

Any such rights granted by us will be conditional upon an applicant obtaining a suitable carbon storage permit as the Lease is dependent on the permitfrom DECC or the Scottish Government (in relation to Scottish territorial waters around Scotland).

Throughout 2012 we will continue to work up our template lease agreement with the entrants to the DECC 2012 competition, EEPR winner and NER entrants. A standard form of lease will be made available to wider industry for their information. This standard form will be open to amendment depending on future competition guidelines.