The Nordic countries are taking bold steps to turn carbon dioxide (CO2) into an asset rather than a liability. With abundant renewable energy, geological storage capacity and strong climate policies, the region has positioned itself as a leader in carbon capture and utilisation (CCU).
However, a new report from the Climate Leadership Coalition (CLC), ‘Carbon Removal and Utilisation in the Nordic Countries: Status, Outlook, and Policies Needed’, reveals that this leadership is not without its challenges.
“The need for carbon removals is immense,” the report states. “On a global level, we would need 7 – 9 Gt (gigatonnes) annual removal capacity to reach climate neutrality, an amount equal to the current thermal coal market.” With deployment requiring long lead times, the report stresses the need for immediate action.
Projects and economic potential
The Nordics boast several strengths in CCU and carbon dioxide removal (CDR), including “a large amount of biogenic CO2 from point sources, essential for BECCS (bioenergy with carbon capture and utilisation) deployment; cost-competitive and abundant clean power production; capacity to store CO2 geologically both offshore and onshore; and leadership in climate issues and green technology.”
Norway’s Longship project combines industrial CO2 capture with the Northern Lights offshore storage facility, while Iceland’s Carbfix project mineralises captured CO2 into basalt rock, creating a scalable and permanent storage solution. Sweden and Denmark have prioritised bioenergy with carbon capture and storage (BECCS), focusing on waste-to-energy plants and forest industry operations. These initiatives aim to make use of the region’s estimated 100 million tonnes of biogenic CO2 emissions annually.
The report also highlights the economic promise of CCU technologies, which “enable the creation of synthetic, carbon-free fuels and materials… [that] can serve as valuable medium- and long-term carbon storage solutions.”
However, scaling these applications is challenging. Demand remains low, with the current voluntary market, led by companies like Microsoft and Google, representing only eight million tonnes annually. Public procurement, such as Sweden’s reverse auctions, has been lauded in the report as a model to incentivise early-stage deployment and drive competition.
Challenges and the need for policy alignment
Despite the advancements, the report critiques the existing policy environment, describing it as fragmented and insufficient to support large-scale deployment. While countries like Denmark and Sweden have introduced mechanisms such as reverse auctions, the report argues that “national initiatives are essential for ensuring scale-up and the utilisation of Nordic strengths.”
The regulatory landscape poses additional hurdles. Waste-to-energy plants in the Nordics emit both biogenic and fossil CO2, yet current EU rules do not allow for their separate treatment, limiting the potential for maximising biogenic emissions in CCU. Infrastructure challenges further complicate the picture, as the report emphasises the need for “enabling infrastructure, transportation pipelines, [and] intermediate storage” to facilitate transnational CO2 transport and storage.
Even with the region’s clean energy advantages – “nearly 60% of all energy consumption in the Nordics… based on renewables, biofuels, and nuclear” – energy-intensive technologies like direct air capture (DAC) will require substantial investment in clean power infrastructure. The Nordics rely heavily on Norwegian offshore storage sites, making cross-border cooperation and legislative alignment crucial.
While CCU offers a promising solution, the report tempers its optimism by stressing that “reducing emissions is the primary priority in the coming years.” CCU must complement, not replace, broader mitigation efforts.
As the report aptly states, “The Nordic countries have excellent conditions to position themselves as pioneers… but a forward-looking and ambitious national strategy guided by a predictable investment environment is essential.” The future of CCU in the Nordics will depend on their ability to bridge policy gaps, build enabling infrastructure and foster markets for sustainable innovation.
