The Dutch government has told a consortium of companies including Royal Dutch Shell Plc and Exxon Mobil Corp. that it will spend 2.1 billion euros in the coming years on a project to capture greenhouse gases and store them on the seabed near the port of Rotterdam.
The Port of Rotterdam produced 22.4 million tons of carbon dioxide last year, which is about 14% of the country's annual emissions. The carbon capture project, known as Porthos, will capture pollution from companies' refineries and hydrogen production plants in the general network. The gases will then be compressed and piped offshore and pumped into a sandstone reservoir three kilometers below the seabed where natural gas was once located.
In the European Union, industrial companies are already paying huge sums for carbon emissions through the emissions trading system. This year alone, the price of a tonne of carbon has risen by about 70% to almost € 55 per metric tonne.
According to the organizers of the project, the creation and operation of a Dutch carbon capture system could cost companies an average of about 80 euros per tonne. A government subsidy compensates for the difference by paying - at current prices - about € 25 per tonne of emissions.
Companies involved in the Rotterdam Portus project have said they aim to launch a carbon capture system by 2024. By then, the price of carbon may already be high enough to eliminate the need for additional government subsidies that will be offered for the hub's first 15 years. BloombegNEF analysts expect the carbon tax to exceed € 100 per ton by 2030.
Similar models for capturing greenhouse gases are being implemented in Norway and the UK, also with government support.