Yara, Ørsted, and the €200/ton Mirage: What Northern Lights …

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Northern Lights, Europe’s flagship cross-border carbon capture and storage project, is now ready to receive carbon dioxide for sequestration, with the first ships in the water and expected to start delivering waste gas from customers this year. It’s being celebrated as a triumph of climate leadership and engineering.

But when you dig into the economics, policy scaffolding, and technology choices—especially as revealed by subscriber behavior and cost structures—it becomes clear that this is not a scalable model for decarbonization. It’s a highly subsidized, narrowly applicable solution built for a specific political moment.

Three articles I published on CleanTechnica trace the story from multiple angles: who signed up and why, the shaky maritime transport assumptions, and the geology and operational details of the Johansen formation sequestration site. Together they reveal a system that works, but only just—and only for a specific sliver of emitters with unusual characteristics or generous government support.

Let’s start with the subscriber list. Yara’s ammonia facility in Sluiskil produces a highly pure stream of CO₂ as a byproduct, making capture relatively cheap and easy. Norcem’s cement plant at Brevik has been lavished with Norwegian subsidies for years. Celsio’s waste-to-energy plant in Oslo operates in a politically sensitive urban zone and has political capital to burn. Ørsted’s bioenergy with carbon capture and storage (BECCS) operations are in the mix too, leveraging the illusion of net-negative emissions to justify significant expenditure. (A quick note: the first article asserted that Exergi was in phase one, but it turns out it’s the only committed customer for phase 2. Mea culpa.) Every one of these firms either has a pure CO₂ stream, direct government backing, or both. This isn’t a technology winning on its merits. It’s a coalition of convenience surviving on subsidies and exceptionalism.

Then there’s the shipping segment. CO₂ is being liquefied and loaded onto custom-built ships for a voyage to the Øygarden terminal in Norway, where it’s pumped into underground reservoirs. That might sound elegant, but it’s a logistical house of cards. The ships are slow, the windows for docking are narrow, and the economic case is barely plausible even with decades of upstream oil and gas infrastructure expertise behind it. The shipping cost alone is estimated at around €27 per ton. That might be manageable now, but it’s exposed to volatility in fuel prices, labor, weather risk, and the cost of vessel construction and maintenance. There’s also the fact that CO₂ is a heavy, low-value cargo. Try to scale this and you’ll hit port bottlenecks and ballooning operational costs long before you hit climate relevance.

The final leg of the journey—into the Johansen formation—is technically competent. The reservoir has good porosity, the caprock is solid, and the injection wellhead is built with Statoil’s usual North Sea rigor. But it’s also a fossil footprint monument. Everything about the site—from the seabed pipeline to the storage dome—is a retrofitted fossil fuel asset. This is not how you decarbonize an economy; this is how you extend its tailpipe.

What does this mean for costs? The breakdown for the five Phase 1 subscribers is instructive. Capture costs range from €50 to €150 per ton, depending on process purity and technology. Shipping adds another €30. Sequestration another €30. That puts the total cost per ton of CO₂ stored at about €107 for Yara, €207 for Norcem and Celsio, and €157 and €167 for Ørsted (the Avedøre plant is trucking liquid CO2 100 km in about 30 truck loads every day pending a pipeline which will likely never be built). These are not trivial sums. They’re well above the EU ETS carbon price, which means that none of these would proceed without direct public subsidies, cost pass-through to captive customers, or an elaborate accounting scheme that inflates the value of “negative” emissions.

That brings us to Joe Romm and BECCS. Romm has long been one of the clearest-eyed analysts of carbon policy and energy technologies, and his recent 2023 paper dismantles the case for BECCS with forensic clarity. He documents how the entire BECCS concept rests on heroic assumptions: that biomass is truly sustainable and net-zero, that capture can be done efficiently at small, distributed biomass sites, and that long-term sequestration actually works at scale. He shows how BECCS not only diverts policy and funding away from real decarbonization, but also opens up dangerous land-use pressures that displace food, ecosystems, and people. The basic insight is simple: BECCS is an illusion baked into models like those from the IPCC not because it works, but because it makes the math of overshoot scenarios look better. In reality, the logistics, economics, and land-use conflicts render it an implausible climate solution. Romm’s 20th anniversary edition of his book The Hype About Hydrogen will be shipping on Earth Day, so preorder your copy know.

And yet here we are—Europe’s most celebrated carbon storage project is being bankrolled by BECCS customers. It’s the epitome of Romm’s warning: a complex, expensive, and uncertain system being legitimized by the promise of negative emissions that may never materialize. The irony, of course, is that the same governments subsidizing this effort are also dragging their feet on grid interconnection, heat pump deployment, and direct electrification of industrial processes—the very things that would deliver near-term, low-cost, scalable decarbonization.

There’s another lesson or two to draw out of this. Yara is literally the best possible case for CCS. Its process emissions from steam reformation of methane are very pure, making capture as cheap as it gets. It’s right on the water, so its CO2 doesn’t have to transit any densely populated neighborhoods, something that’s likely to stop all CO2 pipelines in their tracks. The end to end system is heavily subsidized. Yet it still costs over €100 per ton for waste disposal. Think of all the plants in Europe that don’t have those conditions of success.

Further, Johansen formation is close to shore and relatively shallow. 100 km of pipelines under the water and then two kilometers down weren’t remotely cheap, but this is about as cheap as offshore sequestration sites are going to be. The shipping component adds a lot of costs per ton, but frankly offshore sites further away are going to see a lot higher costs per ton for sequestration.

As I noted in my global assessment and projection of cement decarbonization from a year ago, I have long held that CCS might pencil out for cement, under two or three conditions. The first is that the waste stream be purer CO2 due to electrification of limestone kilns, reducing the cost of capture. I pointed to Sublime Systems’ electrochemical approach and its 10 bar, cold stream of CO2 from turning limestone into quicklime as making that even better and cheaper. And I said that the sequestration site had to be either very close to the cement plant or the cement plant had to be waterside with a pipeline to offshore sequestration. Those are the requirements for it to pencil out. If you look at Norcem’s €207 per ton despite massive subsidies from beginning to end of the CCS chain, it should become clear that there is no economic model without subsidies.

Northern Lights is not a failure. It’s a functioning demonstration of what you can do with unlimited capital, political will, and geological fortune. But it’s not a model for global climate action. It’s a showcase of what happens when fossil legacy systems are given a second act under the green spotlight, and when techno-fixes displace structural reform. Real decarbonization doesn’t sail in tankers filled with gas. It comes from changing the system so we don’t pump out the waste gas in the first place.