Danish energy company Ørsted (CPH: ORSTED) has signed an agreement to sell 330,000 tons of carbon dioxide removal (CDR) credits to Norway’s Equinor (NYSE: EQNR) over the next ten years.
These credits come from Ørsted’s Kalundborg CO2 Hub, which will capture 430,000 tons of biogenic carbon dioxide (CO2) annually starting in 2026.
The CO2 is sourced from biomass-fired plants and will be permanently stored beneath the North Sea, contributing to negative emissions by removing CO2 from the atmosphere.
This agreement plays a vital role in financing the project, as biomass-based carbon capture and storage (BECCS) technology is still in its early stages and comes with high costs.
The sale of CDR credits, alongside support from the Danish Energy Agency, has been critical for the realization of the project, Ørsted said in a statement on Wednesday.
Relevant: Ørsted Partners With MT Group For New Carbon Capture Facility In Denmark
For Equinor, this partnership supports its goal of cutting net scope 1 and 2 emissions by 50% by 2030.
The company plans to meet no more than 10% of this target through CDR credits, with the remaining 90% coming from direct emissions reductions.
Ole Thomsen, Senior Vice President of Ørsted’s Bioenergy division, expressed satisfaction in expanding the existing partnership with Equinor, noting their shared commitment to advancing carbon capture and storage (CCS) technologies.
Equinor’s Svein Skeie emphasized the importance of building new markets for carbon reduction and removal to achieve climate goals.
Ørsted’s partner responsible for storing the CO2, Northern Lights, is partially owned by Equinor.
Read more: Equinor Drives Norway’s Advance In Carbon Capture, Utilization And Storage
