Porthos project secures up to €2.1bn from Dutch government

The Porthos project has taken a significant step forward, with its four prospective customers winning a grant of up to €2.1bn from the Dutch government.

The project, being developed by our member the Port of Rotterdam, will involve the customers - Air Liquide, Air Products, ExxonMobil and Shell – capturing CO2 from their facilities in the port. The CO2 will then be transported by Porthos, a European Project of Common Interest, to empty gas fields in the North Sea seabed for permanent storage.

“The [grant] forms a major milestone in the run-up to the realisation of Porthos,” the project said.

A final investment decision is set to be taken in the first quarter of 2022, with a view to the network transporting the first CO2 for storage in 2024.

The funding will come from The Netherlands’ SDE++ scheme which supports projects reducing the country’s collective carbon emissions. The finance helps bridge the gap between the current rates for CO2 emission allowances (ETS) and the costs involved in the capture and storage of CO2 (CCS).

Porthos said the €2.1bn funding represented a budget reservation and is the maximum that can be paid over 15 years. The final payment is expected to be significantly lower, since the ETS rate is expected to rise further in the years ahead. This is mainly due to the EU’s decision to raise its carbon reduction target for 2030 from 40% to 55% compared to the 1990 baseline, as well as its efforts to take a growing volume of emission allowances off the market. In practice, the government will only be paying the difference between the ETS rate and the cost price of CCS. In other words, as ETS rates rise, SDE++ grant allocations will decrease. The funding will be cancelled altogether when current ETS rates surpass CCS costs per unit.

The four Porthos customers will supply their CO2 to a collective pipeline running through the port. The CO2 will then be pressurised in a compressor station before being transported through an offshore pipeline to a platform in the North Sea and pumped into an empty gas field for permanent storage. Initial CO2 storage capacity is expected to be 2.5Mton a year.

Graphic: courtesy of Porthos