The City of Oslo ensures realisation of carbon capture and storage (CCS)

Today, the City of Oslo and the new owners of Fortum Oslo Varme have entered into an agreement to ensure full financing of the carbon capture plant at Klemetsrud.

Les pressemeldingen på norsk.

PRESS RELEASE, The City of Oslo, Tuesday 22 March 2022, updatet 24 March:

The new owners are Hafslund Eco, Infranode and HitecVision. The City of Oslo’s shareholding in Fortum Oslo Varme will be transferred to Hafslund Eco, which will be the majority owner in the new company.

“We have been looking for a funding solution for carbon capture at Klemetsrud for a long time now. Together with Hafslund Eco and our new partners, the City of Oslo will now make carbon capture at Klemetsrud a reality from 2026,” says Governing Mayor of Oslo Raymond Johansen (Labour Party).

The waste-to-energy plant at Klemetsrud is currently responsible for 17 per cent of the city’s emissions, and is the biggest single emitter of CO2 in Oslo. From 2026, up to 400,000 tonnes of CO2 will be captured each year. This corresponds to the annual emissions from 200,000 cars.

The City of Oslo and its partners will now invest up to NOK 6 billion in the project. The Norwegian government has pledged NOK 3 billion.

“Carbon capture costs money, but we believe it is an absolute necessity to make this investment now. We are doing this in the expectation that the government will fulfil its part of the obligations, so that we can start the project in the summer. If we are to achieve our global climate goals, we need carbon capture,” says Johansen. The City of Oslo also sees this as an important investment in the company’s ongoing industrial development.

“Waste management is a global challenge that currently generates enormous emissions. Large volumes of waste are deposited in landfills. Recovering energy from residual waste using carbon capture is part of the solution. Now the whole world can look to Oslo to learn. Norwegian knowledge can become a global export,” says Johansen.

Fortum sells its shareholding in Oslo Fortum Varme

Hafslund Eco, Infranode and HitecVision have entered into an agreement with Fortum to purchase Fortum’s 50 per cent shareholding in Fortum Oslo Varme. As part of the transaction, the City of Oslo is transferring its 50 per cent shareholding to Hafslund Eco, which is wholly owned by the City of Oslo.

”We are bringing on board two serious players with capital, rock-solid expertise and the motivation to develop a green company in collaboration with Hafslund Eco. For the City of Oslo, implementation of the carbon capture project was an absolute prerequisite for the transaction. HitecVision and Infranode were of the same view and can see the major opportunities offered by the carbon capture project at Klemetsrud,” says Vice Mayor for Business Development and Public Ownership, Victoria Marie Evensen (Labour Party).

Hafslund Eco confirm that they and their partners regard carbon capture as an important commitment, to be able to realise the vision of an emission-free, renewable and fully electric future.

“We will do everything possible to ensure successful implementation of carbon capture at the Klemetsrud facility. If Oslo is to become even greener, further investments in district heating and cooling will also be important,” says Martin S. Lundby, Deputy CEO and Executive Vice President for Growth and Investments at Hafslund Eco.

The City of Oslo is funding its contribution with external borrowings and not through the city treasury. A limited liability corporation is being established which is wholly owned by the City of Oslo. The City of Oslo is pledging an existing shareholder loan to Hafslund Eco as collateral so that the company can borrow up to NOK 2.1 billion to fund the municipality’s share of the project.

“In future, it will be more expensive to pollute. And while this project is not without risks, we believe that a large-scale carbon capture plant at Klemetsrud will be profitable once the price of capturing CO2 is lower than the price of discharging CO2 directly into the atmosphere,” says Vice Mayor for Finance, Einar Wilhelmsen (Green Party).

“Capturing and storing CO2 at Klemetsrud is a matter of urgency, first and foremost for our children. Children who are attending kindergarten now will likely see out the century and, during their lifetimes, we must not only cut all emissions to zero, but also remove the CO2 that has already been emitted. This means that capture projects such as at Klemetsrud will be crucial for the future of our children,” says the Vice Mayor for Education and Child Services, Sunniva Holmås Eidsvoll (Socialist Left Party).

This week, the City Government will present a proposal on the case to the City Council to be considered at the City Council meeting on 27 April 2022. The parties will be able to sign a final agreement subject to approval from the City Council and the Norwegian Competition Authority.

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