In a year when Europe is under increasing pressure to accelerate climate action, the Northern Lights CO₂ storage project—Norway’s high-profile bid to commercialize carbon capture and storage (CCS)—is preparing to launch operations. Hailed as a cornerstone for Europe’s future CCS market, the project is set to begin storing industrial emissions beneath the North Sea this summer. But beneath the surface, analysts warn of mounting logistical constraints, underwhelming capacity, and ballooning costs that challenge the project’s promise as a scalable climate solution.
A Pioneering Project Under Pressure
Northern Lights, backed by oil majors Equinor, Shell, and TotalEnergies, and funded in part by the EU and Norwegian government, is the first cross-border CCS transport and storage initiative of its kind. It will initially handle emissions from heavy industries in Denmark, the Netherlands, and Norway, storing 1.5 million tonnes of CO₂ annually in offshore geological formations. However, project insiders and analysts say this goal is already being strained by a mismatch between ambition and infrastructure.
At present, only two 130-metre liquefied CO₂ (LCO₂) carriers—each capable of transporting 8,000 tonnes—are available to ferry emissions from industrial sites in continental Europe to Norway’s Øygarden terminal. These include emissions from Yara’s ammonia facility in the Netherlands (targeting 800,000 tonnes/year) and Ørsted’s Danish biomass plants (targeting 430,000 tonnes/year). Heidelberg Materials, operating a cement factory in Brevik, Norway, will also feed emissions into the system.
Given the ships’ capacity and the time-intensive process of cleaning CO₂ tanks between voyages—up to three days per turnaround—it is logistically infeasible for two vessels to sustain these targets. “Operating the project with only two ships was never feasible,” said one source involved in Northern Lights, speaking on condition of anonymity.
Infrastructure Bottlenecks and Scaling Hurdles
While two additional LCO₂ carriers are on order—scheduled for delivery by 2026—the scale of transport required to meet phase-two goals raises larger concerns. Northern Lights has already committed to a fivefold increase in storage capacity to 5 million tonnes per year by 2029, including a 900,000-tonne annual deal with Stockholm Exergi. Based on existing carrier capacity, achieving this would require a fleet of at least 12 vessels.
Yet, as Per Mottram Hogström, senior lecturer in marine technology at Chalmers University, points out, “Shipyards currently have limited capacity to build more of these vessels, which could become a problem for the industry’s ambitions.”
Moreover, expanding LCO₂ carrier volume faces technical and economic constraints. Liquid CO₂ is heavier and more volatile than LNG, which complicates ship design and drives up capital expenditure. These challenges undermine expectations that transport costs will decrease with scale. “We can’t expect the technology to get a lot cheaper in the future,” Hogström added.
CCS Economics: Still a Risky Bet
Carbon capture is often presented as a crucial component of net-zero pathways, with backing from the IEA, the European Commission, and UN bodies. Yet, real-world performance has been spotty. Andrew Reid of the Institute for Energy Economics and Financial Analysis (IEEFA) highlights that “pilot projects have failed miserably,” falling short of capture targets or facing unsustainable costs.
Wood Mackenzie estimates CCS currently costs between €100 and €200 per tonne of CO₂. For companies like Yara, targeting 800,000 tonnes annually over 15 years, this translates to €1.2–2.4 billion in potential operating costs—assuming transport and storage function seamlessly. But given capacity constraints, weather delays, and port maintenance downtime, continuity is far from guaranteed.
The economics are further complicated by opacity. Yara declined to provide specific answers on transport logistics or cost structures, citing commercial sensitivity. Ørsted offered no comment at all.
Public Subsidies, Private Uncertainty
So far, public funds have absorbed much of the project’s cost. The EU has provided €131 million through its Connecting Europe Facility, and Oslo continues to underwrite major portions of infrastructure development through its Longship programme. However, as Northern Lights attempts to scale to a commercial level, the sustainability of this financial model becomes increasingly fragile.
“There’s a real question of whether this can ever be profitable without continuous state backing,” said a CCS market analyst at a European consultancy firm. “The infrastructure is bespoke, the market is immature, and the cost per tonne of avoided emissions is still too high for the private sector to take the lead.”
Climate Strategy or Fossil Fuel Lifeline?
Environmental groups also question whether CCS offers true climate value, or if it merely extends the lifespan of carbon-intensive industries. Critics argue that by subsidizing emission storage for industries like cement, ammonia, and biomass, governments risk locking in fossil fuel dependency rather than accelerating the transition.
Even within the CCS community, there’s a recognition that shipping CO₂ is a workaround, not a permanent solution. Pipelines offer greater volume and cost efficiency, but require years of permitting and cross-border cooperation. Until then, maritime transport remains the bottleneck.
The Road Ahead
Despite its shortcomings, Northern Lights remains a critical test case for Europe’s CCS ambitions. Its success—or failure—will inform upcoming EU infrastructure planning and private investment in carbon capture technologies.
But for now, the numbers tell a more cautious story. Between limited vessel capacity, uncertain long-term funding, and high per-tonne costs, the project’s scalability and climate impact are far from guaranteed. In its current form, Northern Lights offers a glimpse not just into the potential of CCS, but into the many trade-offs and uncertainties that define Europe’s decarbonization path.
