UK launches second carbon storage licensing round to unlock billions of tonnes of CO₂ capacity

The North Sea Transition Authority (NSTA) has opened the UK’s second carbon storage licensing round, offering 14 offshore areas for exploration and appraisal across Scottish and English waters in a step designed to expand subsurface capacity for industrial decarbonisation.

According to the original report, the areas comprise a mix of depleted hydrocarbon fields selected by the NSTA and saline aquifer sites identified through a Call for Nominations earlier this year, a process that allowed industry partners to propose locations they judged to have higher chances of successful project delivery. The NSTA said the package of sites would support future capacity needs for the UK and Europe as carbon capture and storage (CCS) projects progress.

The round follows a similar exercise in September 2023 in which 21 licences were awarded. Industry estimates cited by reporting suggest the 14 areas offered in this round could provide up to about 2 billion tonnes (two gigatonnes) of additional CO₂ storage capacity, potentially materially increasing the UK’s long‑term storage options if projects proceed to development.

NSTA chief executive Stuart Payne said: “The UK Government has signalled its total support for carbon storage and the jobs and investment it can create as a vital part of the energy transition. We are proud to be launching this licensing round, working in collaboration with other authorities, especially Crown Estate Scotland and the Crown Estate to support this vital industry in the next stage of its development.”

Applicants must secure seabed agreements from Crown Estate Scotland for Scottish waters or from The Crown Estate in English waters before projects can advance, and the NSTA said it will work with both seabed managers to streamline licensing and leasing processes. Crown Estate marine managing director Gus Jaspert said: “Carbon capture is vital in supporting hard-to-abate industries to decarbonise and is a core element of the UK’s energy transition. We have worked with the NSTA to ensure the interests of other vital sectors including offshore wind, aggregates, cables and nature were considered. We look forward to continuing to work together and collaborating through our Marine Delivery Routemap programme as we evolve our approach to seabed leasing for carbon capture and storage to support the sector’s development.”

The licensing window remains open until 24 March 2026, after which applications will be reviewed and licences are expected to be awarded in early 2027. The process is explicitly aimed at accelerating appraisal activity in locations that could be mobilised by industry to meet near‑term and medium‑term storage demand.

CCS is widely regarded as necessary to decarbonise heavy industrial clusters, and the Climate Change Committee has stated there is no viable path to net zero by 2050 without widespread deployment of carbon storage. Government and industry targets envisaged earlier UK storage rates of up to 30 million tonnes of CO₂ per year by 2030; the new licensing round is intended to help close the gap between current capacity and those ambitions by identifying and enabling additional offshore pore space.

The NSTA selected the sites following consultation with Crown Estate Scotland and The Crown Estate, which manage seabed rights. Five of the 14 areas lie in Scottish waters, with nine off the English coast; some are located in regions of particular interest to northern UK industrial decarbonisation plans, including sites to the north‑east of Shetland that local reporting highlighted.

While the announcement signals regulatory support for CCS, developers will face the commercial and technical tasks of securing seabed leases, permitting, appraisal data and transport and injection infrastructure before storage capacity becomes operational. According to the original report, the NSTA introduced updated guidelines for oil and gas producers in March last year that emphasise decarbonisation as a condition for regulatory approvals , a policy context likely to affect incumbent and new entrants seeking to develop storage projects.

For industrial players and investors focused on decarbonisation, the round offers a discrete pipeline of appraisal opportunities but also underscores the need to coordinate seabed agreements, permitting and the build‑out of associated transport and CO₂ management systems. Industry data shows that progressive clustering of emitters, shipping or pipeline hubs and storage sites will be critical to realise both cost and scale advantages; the NSTA’s round aims to identify the subsurface elements of such clusters, but delivering projects at scale will require parallel progress on commercial models, permitting and modal choices for CO₂ conveyance.

The licensing round expands the UK’s structured approach to creating a supply of storage options for CCS projects and represents a policy signal to markets that the UK intends to accelerate storage appraisal. The success of the round in converting offered acreage into operational storage will depend on industry appetite, regulatory timelines, seabed leasing outcomes and the commercial arrangements that emerge to link capture, transport and injection at scale.