Offshore CCUS: A Key Component in the Global Decarbonisation Strategy?

As we enter the second half of 2025, with EV sales waning, countries rethinking their path to decarbonisation and the geopolitical events that dominate the news, has the need to mitigate the effects of the global climate crisis changed? In short, no. Certain forecasts have us missing our target of limiting an increase in global average temperature by less than 1 ^oC above pre-industrial levels. We are already at 1.1^oC, and staying below 1.5 ^oC is becoming increasingly difficult to achieve. If we are to minimise the rise in temperature, we will need to use all the tools in the global decarbonisation toolkit. Accordingly, this is driving countries and industries to explore all initiatives and innovations.

Reducing CO₂ and other greenhouse gases in the atmosphere

Reducing CO₂ and other greenhouse gases in the atmosphere has not been an easy task. We have witnessed that the exploration, development and implementation of sustainable energy sources, such as hydrogen and ammonia (both as a hydrogen carrier and an alternative fuel), as alternatives to fossil fuels have come with challenges.

Removing CO₂ from the atmosphere

With the worsening impact of high levels of CO₂ and other greenhouse gases, not only are efforts to reduce CO₂ and other greenhouse gases in the atmosphere required, but also the need to remove CO₂ and other greenhouse gases in the atmosphere. There are many possible solutions including reforestation, direct air capture, or carbon capture usage and storage (CCUS) – both onshore and offshore.

In this article, we will focus on offshore CCUS and whether it is or can be considered as one of the effective and sustainable methods in removing CO₂, thereby, providing a pathway to decarbonisation.

Offshore CCUS

There are several factors that will determine if offshore CCUS has a role in a country’s (or industry’s) plans for decarbonisation, including:

1. the energy demands (current and future) and climate / energy policies and objectives of those countries;
    
2. the nature of the source of emission (i.e. age and size of the power or industrial plants);
    
3. storage location and resources in relation to the source of emission;
    
4. the public acceptance of CCUS from those countries.

These factors are typically at the forefront for developers and investors (and lenders) who are considering CCUS projects. Although onshore CCUS projects have garnered significant attention, the offshore domain is rapidly gaining momentum.

Offshore CCUS involves capturing CO₂ emissions from industrial sources, transporting them—often via pipelines—to offshore sites, and injecting them into deep geological formations beneath the seabed for long-term storage or potential utilisation. The North Sea, for instance, with its extensive network of depleted oil and gas reservoirs and saline aquifers, has become a focal point for such initiatives. In addition, advocates of CCUS have shown that the technology and process can play a significant part in transforming carbon waste into high-value products.

Offshore CCUS offers certain distinct advantages over its onshore counterpart. For example:

1. Offshore geological formations, particularly depleted oil and gas fields, provide immense storage potential of up to ten times the capacity of onshore sites. This can be seen in the Northern Lights project, a joint venture between Equinor, Shell, and TotalEnergies, operational since 2024 with phase 1 designed to transport and store up to 1.5 million tonnes of CO₂ annually, and phase 2 aiming for 5 million tonnes by 2028. Similarly, the UK’s East Coast Cluster and Acorn projects are aiming to leverage the North Sea’s storage potential and existing infrastructure to decarbonise industrial hubs in Teesside, Humber, and Scotland. The UK Continental Shelf itself has an estimated capacity of 78 billion tonnes of CO₂.
    
2. Offshore storage aids the preservation of valuable land resources by eliminating the need for land acquisition and reducing competition with other land uses.
    
3. Its distance from populated areas mitigates public perception concerns and lowers the risk of CO₂ leakage impacting sensitive resources such as underground water sources.

Despite a barrier of higher upfront costs, with the growing demand for carbon storage, this has resulted in further cultivation in global technological innovation and methods to improve subsurface efficiency and maturation of systems which are expected to drive long-term cost reductions and streamline the monitoring processes, thus, potentially reduce  leakage risks and increase the scalability for carbon storage and utilisation.

But like with any technology or project, there are challenges and risks associated with offshore CCUS:

1. Offshore projects often demand substantial upfront investment due to the technical complexity and logistical challenges associated with site characterization in deepwater environments, such as seismic surveys and drilling.
    
2. The need to transport CO₂ from onshore sources to offshore storage sites also adds logistical complexity. While ship-based transport offers flexibility, pipeline networks are more cost-effective at scale but require substantial investment and planning.
    
3. Then there’s the risk of leakage - although offshore CCUS in stable geological formations may pose a lower risk of CO₂ leakage compared to onshore saline aquifers, the use of depleted oil and gas fields still presents a leakage risk, potentially compromising environmental integrity and climate effectiveness.
    
4. To add to this, navigating the evolving legal and regulatory landscape for offshore CCUS requires continual reviews and evaluations on, amongst other things, managing liabilities and impact stemming from the projects and monitoring the operations of the projects, often involving multiple jurisdictions and international conventions as well as ensuring the relevant investment / funding (government and/or private) to ensure the development and improvement of robust technologies to detect and prevent CO₂ leakage. Clear and harmonised regulations are essential to ensure environmental safety and investor confidence.

Noting the comparative benefits and hurdles in relation to offshore deployment of CCUS, where does this leave the future for offshore CCUS projects in the decarbonisation space? The momentum behind offshore CCUS does not appear to be slowing down any time soon, with most recently, for instance, in March 2025 regarding the expansion of the Northern Lights project following a commercial agreement with Stockholm Exergi to store up to 900,000 tonnes biogenic CO₂ emissions per year for 15 years commencing 2028, and the Bonaparte Basin which is approximately 260km offshore Darwin in Northern Territory of Australia which has the joint venture between Inpex Brow E&P, TotalEnergies CCS Australia and Woodside Energy commencing in April 2025 the pre-front-end engineering design work.

These recent developments, together with current projects as highlighted in the above summary, indicate the recognition for offshore CCUS as one of the many tools in the global decarbonisation toolkit.

Offshore CCUS is one of the many methods for decarbonisation. It offers a transformative opportunity to address industrial emissions at scale, leveraging the unique advantages of offshore geology and infrastructure.

CMS’ deep understanding of the CCUS sector is drawn from experience advising across CCUS projects for over a decade, advising a range of stakeholders on all key aspects of CCUS projects, including in respect of the first UK carbon storage licence, land rights issue and development consent order.

CMS has played a key role in identifying many of the irreducible CCUS risks and proposed solutions for addressing them. The team remains closely involved in the policy landscape for developing the regulatory business models for CCUS projects, drawing on years of experience advising globally on economic regulatory models throughout the energy industry.