Total and Shell back out of carbon storage project in the Netherlands

By Alban Kacher

AMSTERDAM (25 April) - After TotalEnergies & Shell retracted part of their planned investment, the Dutch government announced on Friday that it would invest 639 million euro ($726 millions) in the construction of the largest carbon capture and storing project of the Netherlands.

The two major oil companies have decided not to invest in the infrastructure needed to connect the industries with the storage sites under the North Sea in gas fields that are depleted.

The government stepped in to minimize risks for two remaining investors: the Dutch Gas Grid Operator Gasunie and the Dutch government-owned EBN.

Climate minister Sophie Hermans stated that "this takes away a great deal of risk from the project."

Gasunie reported that Shell and Total plan to remain involved in the development of storage sites as well as in offering storage and transportation services to industrial customers.

The decision to change direction comes at a time when many European energy giants have weakened climate goals and renewables energy targets in order to gain competitiveness with U.S. competitors who have focused on oil and natural gas.

Shell and Total have not responded to our requests for comment.

Final investment decisions on the Aramis Project are expected to be made in 2026. Storage with a capacity of 22 millions tons per year should be operational in 2030.

This should help the Dutch Government achieve its own goal to reduce CO2 emissions in 2030 by 55% compared to 1990.

The government's chief climate advisor has warned that current policies will not be able to achieve the 2030 target.

In an effort to give the project a boost, the government announced on Friday that it will allocate 8 billion euro in subsidies next year for projects promoting sustainable energy. The government will also introduce new incentives for electric cars.

The industries will receive compensation for the relatively high energy costs.

(source: Reuters)