In an effort to maximize and accelerate the decarbonization of Newfoundland and Labrador’s offshore through the development of carbon capture, utilization and storage (CCUS), the Honourable Dr. Andrew Furey, Premier of Newfoundland and Labrador, today announced a new CCUS Innovation Challenge.

Through the CCUS Innovation Challenge, the Department of Industry, Energy and Technology is inviting expressions of interest for financial support to qualifying businesses, organizations and researchers engaged in research and development focused on the development of CCUS in Newfoundland and Labrador’s offshore. Up to $6 million in Provincial Government funding has been allocated for two streams of work:

• Up to $3 million to support research and development to advance the development of CCUS to decarbonize ongoing oil production in the province’s offshore; and
• Up to $3 million to support studies of the potential and feasibility of the province’s offshore to serve as a regional CCUS hub for the storage of locally and externally-produced carbon dioxide.

To learn more about CCUS, please see the backgrounder below.

The funding can support up to 50 per cent of eligible project costs. Proposals must be submitted jointly by industry and academic partners to promote cooperation between these sectors. Lead applicants must be post-secondary institutions in Newfoundland and Labrador with CCUS research experience, and registered incorporated businesses with at least two years of offshore operations in the province. For more information see the backgrounder below, or contact CCUS@gov.nl.ca.

Premier Furey was joined in making the announcement by the Honourable Andrew Parsons, KC, Minister of Industry, Energy and Technology, the Honourable Bernard Davis, Minister of Environment and Climate Change, as well as Dr. Lesley James, a professor with the Memorial University Department of Process Engineering, Kieran Hanley, Chief Executive Officer of econext and Charlene Johnson, Chief Executive Officer with Energy NL.

Offshore CCUS can play a key role in helping Newfoundland and Labrador achieve its greenhouse gas reduction targets. The province’s offshore storage potential could also help other jurisdictions to meet their own emissions reduction targets.

Quotes
“The CCUS Innovation Challenge will help ensure Newfoundland and Labrador’s educational institutions, businesses and workers are at the forefront of this emerging technology, with the goal of creating new, highly-skilled jobs here at home, and solutions that can help Canada and the world to achieve vital decarbonization goals.”
Honourable Dr. Andrew Furey
Premier of Newfoundland and Labrador

“As net zero will not be achieved without large-scale carbon capture technology and storage, offshore carbon storage represents an excellent economic opportunity for Newfoundland and Labrador given its vast offshore storage potential and existing offshore workforce and infrastructure.”
Honourable Andrew Parsons, KC
Minister of Industry, Energy and Technology

“Carbon capture and storage has an important role to play in mitigating climate change and attaining our net zero goals. We are pleased to support the CCUS Innovation Challenge as an impactful initiative to reduce greenhouse gas emissions, promote clean innovation and growth, and support the green economy.”
Honourable Bernard Davis
Minister of Environment and Climate Change

“It is exciting to be part of energy-related research and development efforts. Carbon storage is taking our oil and gas subsurface knowledge and turning it upside down. Engineering wise, it’s exciting to re-think and re-work a complex problem with new objectives and constraints. To educate and train students and ourselves to solve a global greenhouse gas problem and find local innovations and solutions is inspiring.”
Dr. Lesley James
Professor, Memorial University

“Our analysis tells us that net zero by 2050 is not achievable in Newfoundland and Labrador without initiatives that result in negative GHG emissions. Carbon capture, utilization, and storage is a promising technology that can help us – and the world – get there. Therefore, econext is excited about the creation of the CCUS Innovation Challenge. Targeted investments in innovation like the one being made today will help put our province on the leading edge of cleantech development on an international basis.”
Kieran Hanley, CEO
econext

“Carbon capture and storage has the potential to further decarbonize our already lower carbon offshore, while also extending the life cycle of current projects. The CCUS Innovation Challenge is an important way to bring together offshore companies and academic institutions and help move our sector forward. I highly anticipate the role Energy NL members will play in making this exciting initiative a success.”
Charlene Johnson, CEO
Energy NL

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Carbon Capture, Utilization and Storage Innovation Challenge

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BACKGROUNDER

Carbon Capture, Utilization and Storage Innovation Challenge

What is carbon capture, utilization and storage (CCUS)?
Carbon Capture, Utilization and Storage (CCUS) involves the capture of carbon dioxide (CO2) generally from large point sources like power generation or industrial facilities that use either fossil fuels or biomass as fuel.

The captured CO2 can be used in a range of applications or permanently stored. The captured CO2 is compressed and transported by pipeline, ship, rail or truck to be used in a range of applications most commonly Enhanced Oil Recovery (EOR), or permanently stored in deeply buried rocks and sealed off by impermeable layers of rock above. Reaching net zero will require CCUS.

What is the objective of the CCUS Innovation Challenge?
The objective of the CCUS Innovation Challenge is to maximize and accelerate the decarbonization of the offshore through CCUS, and to demonstrate the potential for sequestering externally sourced CO2 in Newfoundland and Labrador’s offshore.

The initiative is a cost-shared funding program, through which the Department of Industry, Industry and Technology will contribute a maximum of 50 per cent towards project costs with the remaining balance provided by the proponent either through its own or other sources.

The International Energy Agency estimates that 14 per cent of global CO2 reductions must come from CCUS by 2060. As there are limited locations globally where significant amounts of carbon can be securely stored, there will be a global demand for carbon storage, representing an economic opportunity expected to be worth billions of dollars.

Jurisdictions with existing offshore oil and gas industries have distinct competitive advantages in this regard. This is because they have available and extensive offshore geological data, infrastructure such as platforms that can be repurposed to transport and inject CO2 into offshore reservoirs, and a skilled offshore workforce that requires relatively little training to carry out CCUS activities. Offshore CO2 storage, particularly in deep water areas, also allows for these activities to be conducted in areas that will present minimal disruption to human activities and the environment.

Newfoundland and Labrador’s offshore, which initial estimates suggest has a gigaton-level storage potential for carbon dioxide, is an ideal candidate for the establishment of a significant CCUS industry. A CCUS industry would enable the province to maximize the lifespan of current oil-producing assets by enabling further de-carbonization of existing production activities and storage of imported carbon dioxide. In addition, it would provide a substantial new economic opportunity for the existing offshore infrastructure and workforce for decades to come.

What is involved with the CCUS Innovation Challenge?

This call will focus on two challenges:

• Offshore CCUS to decarbonize existing oil production

The first challenge is focused on the potential of Newfoundland and Labrador’s active offshore fields to facilitate carbon storage to decarbonize existing oil production. This research and development challenge will require active offshore operators and post-secondary institutions in the province to partner to facilitate knowledge transfer and build capacity, as well as to identify how offshore CCUS can contribute to Newfoundland and Labrador’s goal of reducing carbon emissions by 30 per cent from 2005 levels by 2030. The Provincial Government will award up to $3 million to support this challenge.

• The province’s potential to establish an offshore CCUS hub

The second challenge will focus on research and development of CO2 storage and transportation technologies, particularly with regard to the transport of externally sourced CO2, as well as on related scientific activities that advance and enable the characterization and development of safe, cost-effective, and permanent geological storage of CO2. Projects should consider the development of a roadmap for offshore implementation in hub scenarios in the province’s offshore. The Provincial Government will award up to $3 million to support this challenge.

Proposals submitted for funding under the CCUS challenge must demonstrate the potential to deliver technical, economic, and other impacts and benefits, such as:

• Demonstrating the viability of offshore CCUS in Newfoundland and Labrador;
• Furthering the development of knowledge and/or technology that will enable offshore CCUS in the province;
• Facilitating CCUS collaboration between academia and industry in the province;
• Improved awareness of the province’s offshore as a potential solution to help industry and other jurisdictions achieve decarbonization targets;
• Improved awareness of offshore CCUS in the province as a potential business, investment, and employment opportunity; and
• Promoting the province as a leader in offshore CCUS technologies and the green transition.

All proposed work must be completed within a 24-month period from the date that funding is received. At the discretion of the Department of Industry, Energy and Technology, limited extensions may be provided in cases where proponents can demonstrate sufficient justification.