UK opens second offshore carbon storage licensing round amid acceleration of CCUS efforts

The North Sea Transition Authority (NSTA) has opened a second offshore carbon storage licensing round, offering 14 areas , five in Scottish waters and nine off the coast of England , that together could add as much as 2 billion tonnes of CO2 storage capacity to the UK continental shelf, the regulator said.

The round, launched after what the NSTA described as “extensive consultation” with The Crown Estate and Crown Estate Scotland, follows the regulator’s 2023 round which awarded 21 licences. Those projects together are assessed to have potential to store up to 30 million tonnes per year of CO2 by 2030, equivalent to roughly 10% of the UK’s current annual emissions. The NSTA’s public notice sets a 12:00 GMT application deadline of 24 March 2026; licence awards are expected in early 2027. Applicants will also need a seabed agreement from the relevant Crown Estate body before progressing, and the NSTA notice lists an application fee of £19,710.

The move comes amid an intensified UK Government push to build a competitive carbon capture, usage and storage (CCUS) market. According to a government announcement, plans to create a more competitive allocation process for projects by 2027 are backed by an unprecedented investment package of about £20 billion; other reporting and government-linked material frame public funding commitments as £21.7 billion over 25 years targeted at priority industrial regions. The government has also signalled measures to expand access to CO2 transport by enabling non‑pipeline options , ship, road and rail , from 2025 and has established a CCUS Council to coordinate deployment across sectors.

Industry data and expert estimates underline the scale of the geological opportunity and the urgency of delivery. The British Geological Survey estimates the UK continental shelf could theoretically store up to 78 billion tonnes of CO2. Industry bodies see new storage licences as essential to convert that theoretical capacity into operational sinks for captured emissions.

Yet the pipeline of UK capture projects has faced headwinds. The Carbon Capture & Storage Association’s (CCSA) CCUS Delivery Plan Update 2025 reports that 27 UK capture projects have been cancelled since 2023, reducing planned capture capacity by around 15 million tonnes per year. The CCSA has urged government for clearer, more streamlined regulation to avoid further attrition and to give existing licensed projects a viable route to market.

Mark Sommerfeld, UK director of the CCSA, welcomed the second licensing round as “a crucial step” for CCUS in the UK and said the association’s Delivery Plan “highlights the urgent need for both additional CO2 storage capacity, which will be delivered by this new round, while also ensuring that existing licensed projects are given a clear route to market to complete the development of their stores.”

Industry observers note that the licensing round must be paired with commercial frameworks and transport solutions to convert licences into operational storage. Several capture projects have advanced to final investment decision (FID), including Net Zero Teesside Power, Padeswood CCS and Protos Energy Recovery Facility, but the broader project pipeline contains more than 100 proposals at varying stages of development, reflecting both investor interest and the sector’s vulnerability to policy and market shifts.

The NSTA said the second round aims to support industrial decarbonisation in the UK and Europe by expanding options for long‑term CO2 disposal. The regulator’s public documents specify that the offered sites comprise a mix of depleted hydrocarbon fields selected by the NSTA and saline aquifers nominated by industry for appraisal, reflecting a focus on locations with strong technical potential.

For industrial decarbonisation strategy, the licensing round represents a necessary, though not sufficient, step. Government funding and regulatory reforms are intended to stimulate capture projects and the transport infrastructure required to deliver CO2 to storage sites, but industry groups and project developers warn that clearer allocation mechanisms, predictable revenue models and faster consenting will be needed if the UK is to turn geological capacity into reliable, large‑scale storage before 2050.