MATHIAS STECK     Hello, and welcome to the 12th series of the DNV Talks Energy podcast. I'm your host Mathias Steck. In the first episode we explored how the world's energy needs are changing, which was a great introduction to the overall theme of this series, the way in which the clean energy transition affects people and how they affect it. One of the ways in which industrial change affects people is when it impacts on their livelihoods. In this episode, we explore what the energy transition means for jobs and skills and how efforts are being made not only to protect existing jobs, but to create new ones in a clean energy future. We look in particular at carbon capture, utilization and storage, or CCUS, the relatively new industry which could help protect jobs in high emission industries, as well as creating new roles in the industry itself as it expands.

I'm delighted to be joined by two special guests for this week's episode Neri Askland, is VP Energy Transition Solutions and Head of US Northeast Gas Option Project at the energy company Equinor. Equinor is pursuing an approach to make carbon capture and storage commercially viable in the decarbonized energy system of the future. And Valborg Lundegaard, CEO of Aker Carbon Capture. Aker has been instrumental in carbon capture technology development and is implementing projects globally to help companies decarbonize.

With the help of my guests today, we'll explore how CCUS innovative energy projects more broadly will contribute not only towards a stable employment market as the energy transition progresses, but in growing an exciting one. We hope you enjoy the episode.

First of all, many thanks to both of you for joining me today. For the benefit of our listeners. It would be great to start with an introduction of yourself, your organization and your roles within them. Could I start with you, Valborg and then Neri?

VALBORG LUNDEGAARD     Thank you very much, Mathias, and thank you so much for inviting me. So, I'm the CEO of Aker Carbon Capture. I took on this position in the summer of 2020, and my background is as a chemical engineer. I've been with the Aker group for almost three decades. I've been on a number of large field development projects and had various corporate positions. So, when we started up our company in August 2020, it was a pure play company and we were listed on the Oslo Stock Exchange. But even though we have a new company, our group is certainly not new. The Aker Group has an hundred and eight-year long history and in carbon capture a history of around, well, more than 20 years. It actually started back in 1996 on the Norwegian Continental Shelf, when Equinor stored CO2 on the shelf for the first time in the world at the Sleipner field, and Aker delivered that Sleipner platform. Since then, we have developed the technology, the Aker Group, together with Norwegian universities and research institutes, and today we have proprietary technology with unique HSC characteristics.

So now, 18 months after the establishment of the Pure Play Company, we are involved in several projects in Norway, Netherlands and UK. We deliver studies, feed EPC and licensed project and aftermarket services, and we have offered an innovative carbon capture as a service model. It's a one-stop-shop where our customers just simply pay per tonnes of CO2 captured. Our focus is on northern Europe so far, but we're searching, certainly watching the global market and there’s a lot of interest right now looking at what's happening in North America.

MATHIAS STECK     Very good. Many things, Valborg. Neri, what about you?

NERI ASKLAND     Thank you, Mathias and thank you for the invitation today also to join you and Valborg on this topic. My name is Neri Askland and I'm responsible for a unit in our international business area called Energy Transition Solutions and I'm also heading our decarbonization initiatives in the US.

And for us, we have our significant oil and gas production over the next decades. And as a company need to find decarbonization solutions to meet our net zero ambition and our corporate strategy, strategic objectives is really to focus on optimizing our oil and gas portfolio and growing renewables as well as develop new value chains in low carbon solutions. And my focus is on decarbonization solutions for mitigating our Scope Three emissions. Scope Three emissions is the largest emission group linked to use of sold products, and it represent up to 90 percent of the total greenhouse gas emissions.

MATHIAS STECK     Thank you very much for your introduction, both of you. I want to begin by looking at the broad picture, and I would like to ask both of you this question. When it comes to skills and employment, what will happen if large companies in hard-to-abate industries are not able to decarbonize?

Maybe we begin with you Neri, and then after that, Valborg.

NERI ASKLAND     OK. In my view this comes down to corporate policies, as well as government policy stimulating decarbonization. Forward-looking companies like Aker, Equinor, U.S. Steel and others already see the direction we need to move, and we are putting our policies and strategy in place. But still, that will not be enough. Hence, the important role of governments. Decarbonization is expensive, especially for hard-to-abate industries, and you see in Europe, US, Japan and so on, we see governments working policies and financial stimulus to support decarbonization of this industry. And by that we create sustainable jobs as well as predictability for this industry, who can sell green  products. On the other side, so what happens for the export industry in countries where governments do not support decarbonization and financial incentives or other means. Their businesses could risk not being able to compete for the growing demand for green products and actually they could gradually lose market share. So that's kind of a risk on that side.

MATHIAS STECK     Thank you, Valborg. What is your view on this?

VALBORG LUNDEGAARD     Well, I certainly support Neri. Companies must decarbonize and there are increased requirements to do so from countries and from companies’ own targets. From regulation, we have carbon taxes and tax credits. It's actually from the emitters own market. Like the cement producers, they are being requested “do you have green cement?” And also the financial market is pushing to work towards decarbonization. But we shouldn't forget employees. We see that employees, they really want to work for companies with a clear purpose and that are driving the decarbonization. And that trend is getting stronger and stronger in particular amongst young people. So, I believe most companies can decarbonize. It varies a bit. You know, the way they can do it, many companies start with energy optimization. Others look into replacing fossil fuel with renewables. And then of course, there's carbon capture utilization and storage.

But what's important is that the companies have a credible plan to reduce emissions and establish sustainable business model. And in total, I would really say that for companies, it's a license to operate, to decarbonize and it's to stay in business and to maintain the skills and employment.  But we shouldn't also forget that it's not only a requirement, it's also an opportunity because there are employee opportunities, employment opportunities in the whole value chain, for instance, in carbon capture utilization and storage, like in Aker Carbon Capture and Equinor.

And when CCS is available, there is an employment opportunity by establishing new businesses.

MATHIAS STECK     Very good. Thanks, both of you. So, in this discussion, we are going to talk about carbon capture utilization and storage and its role in protecting jobs and heavy industries. But to start with, we need to really understand what CCUS is. Could I ask you to give us a summary of how CCUS works and how it can be used to decarbonize industries?

VALBORG LUNDEGAARD     Yes, I'll do my best. So, let's look at the CO2 emissions. Where do they come from?  Well, they come from flue gas or exhaust from various industry segments. It could be like the waste to energy segment from gas powered plants or cement industry, and the content of CO2 in the exhaust varies. In Aker Carbon Capture, we have post-combustion technology, which means that we can apply it to both existing and new industrial plants. It's very flexible. It covers CO2 concentrations of 2 to 25 percent in the exhaust and can capture up to 95 percent of the CO2. Our technology has a double-digit number of patents, including a secret recipe from our non-toxic, biodegradable mixture of water and amine solvents to absorb the CO2. But now to the process itself, and that, you know, sometimes you know, a process seems a bit complex to many, but I'll do the simple way, the cartoon way.

So, this exhaust, including CO2, is routed to an absorber. Or you could call it a chimney, really, where the amine solvent is used to absorb the CO2. It meets this amine solvent so that on top of the chimney, that clean flue gas can be released. And then this rich amine solvent is routed to a desorber. Another column where CO2 and the amine solution are separated. The amine solvent is routed back to the absorber to capture more CO2, like in a closed loop. And then you have the CO2. The CO2 can be liquified. It can be transported on trucks, trains or ships for safe and permanent storage, but it can also be utilized. And for our projects, we have projects where the CO2 is permanently stored that's called CCS. But we also have a project in the Netherlands where the CO2 is captured from the waste to energy plant, and it's utilized as a fertilizer in a greenhouse nearby. That is CCU.

MATHIAS STECK     Valborg, thanks for explaining this. Neri, I want to come to you now. What do you think about innovations such as CCUS we just got explained from Valborg and also maybe green hydrogen. Can those be drivers for job retention in heavy industries?

NERI ASKLAND     Yeah. Let me start a little bit with the overall context on that hydrogen and CCUS is kind of proven technologies. However, they are capital-intensive value chains. As you see in Northern Light - its base - it has public funding, as an important role in de-risking the projects. It's been important also for the industry to show that we are willing to shoulder an appropriate level of risk ourselves. We are not simply asking for public handout. We have developed mature technologies to get over the industry over decades, and we are looking to collaborate with governments and other stakeholders on appropriate framework that facilitates deployment. Analysis shows that the world will produce as much gas in 2050 as it does today. The amount of workforce needed to decarbonize the gas business is enormous and will secure jobs for oil and gas industry for decades to come. The investments in decarbonization for heavy industries will also secure the jobs for this industry for the future, and hydrogen users can select either blue or ultimately green hydrogen. To exemplify for large cities, it is important to have an airport as part of their infrastructure. I think the same you will see for industry clusters in the future. They need a CO2 storage to be able to attract the future clean businesses, and thereby protecting jobs.

MATHIAS STECK     Equinor recently announced a partnership with US Steel to examine the potential for green hydrogen and CCS development in the tri-state region of Ohio, Pennsylvania and West Virginia. These are all states that witnessed an industrial decline over the past few decades. So, what role can these new technologies play in protecting jobs there and reviving local economies?

NERI ASKLAND     Yeah. No, thank you Mathias. What we see that we are serious about our ambition of net zero, and over a year ago, we started a project on how we could decarbonize our attractive gas production in the Appalachian Basin. It is one of our largest producing assets. It has a very good long-term outlook.

And we did our valuation of customer political landscape, CO2 storage options in the areas where we have gas and based on this, we ended up that we see that the tri state-area, including Pennsylvania, Ohio, West Virginia, is a good location for a clean hydrogen hub. There is also the potential then to turn the Rust Belt green, and its an important industrial region in US with a skilled workforce and an appetite for innovation that actually also creates opportunities. In this area. U.S. Steel is a cornerstone business that have an impressive industrial history, and most importantly, they also announced last year a net zero ambition.

And through this, we kind of have a common ground to explore options and solutions for decarbonization. In terms of scale and potential, this is driven by the end user interest. We are engaging the several end users in the region to map the potential for them to decarbonize true use of blue hydrogen and CCS. And based on this, we foresee a phased development that will be will have multiple reforms and end use source in all three states. We are, of course, also fortunate to pool on experience from other projects in our portfolio. In this process, that is important like the Humber development in the U.K. and the last factor, of course, also that this important that you work with these projects, all the public and political acceptance. It is important to engage with the communities to help them understand the vision and the potential, and then work with them to ensure that the investments we do create are value and contribute to equitable transition.

MATHIAS STECK     So it's a great potential for a region like the tri-state, and we heard about the decline, which means there was also unemployment. Do you have a forecast how many jobs could be protected or maybe even created through the US Steel partnership?

NERI ASKLAND     I would not quantify how many jobs will be protected by this, per say, but I can talk about the size of just certain industries and the importance for this in that region. And the tri-state region where Equinor is focusing, has a large power generation business, as well as a large industry - heavy industry - that employs a lot of the workforce in the region. And in Pennsylvania alone, the steel industry directly employs over 12,000 direct workers, and in the U.S. as a whole, the industry employs over 70,000 people, leaving no doubt that this industry is extremely important for them to decarbonize. Also, to be able to stay competitive of their use of the steel industry are meeting and end users from their side again, the car industry and so on that demand green steel. So, therefore the transition is important for them and the industries like the steel industry often are residing in communities where they all the single most important employer.

MATHIAS STECK     Thanks Neri for these insights and Valborg turning again to you now. Over in Europe, we see CCUS clusters emerging. Can you tell us about those in any analysis that has been done to understand the potential impact such infrastructure will have on jobs?

VALBORG LUNDEGAARD     Yeah, the full CCUS value chain requires collaboration amongst policymakers, emitters, carbon capture technology providers and transportation and storage providers. And there is no doubt that clusters will accelerate the development. There are some countries and regions that have taken the lead on this, and UK is a good example. Emissions from Teesside and Humber will be captured, transported and stored in East Coast Cluster, where BP and Equinor are key players in that development. Here we are talking about storage of up to 27 million tonnes per year of CO2 by 2035, and this can provide up to twenty-five thousand jobs until 2050. Aker Carbon Capture, we are involved in the Teesside development through Net Zero Teesside Power Project. It's the FEEDs phase right now. It will be the world's first commercial scale gas fired power station with carbon capture and storage.

We're capturing two million tonne per year of CO2, and we're working here in close collaboration with Aker Solutions, Siemens Energy and Doosan Babcock. Also, another example from the UK is a key customer of ours, Viridor. They are looking at a decarbonizing the waste-to-energy segment. They have a number of ways to energy incinerators around UK and we have entered into an MOU to provide five of our modular carbon capture units to them by 2030. And they're also planning to implement carbon capture onto other plants, larger plants before 2030. In total, this is a capacity of 1.5 million tonne per year of CO2 investments in one billion pounds, thousand construction jobs, and 180 skilled green jobs. And UK is one example. We see similar cluster establishment in Netherlands, Belgium and Germany.

MATHIAS STECK     Right and Aker Carbon Capture is also involved in the first CCS project on a cement plant. Can you tell us a bit more about this and what skills will the company be able to retain as a result?

VALBORG LUNDEGAARD     Yeah. We have been awarded by Heidelberg Cement Norcem, a project in Norway. The first carbon capture plant on the cement facility in the world at the Brevik cement facility. The capacity for this plant will be 400,000 tonnes per year and it will have superior heat integration with the existing cement facility.

There was excess heat available at the plant. We started the EPC contract in January last year, where all key milestones have been met and we placed all major purchase orders. So, this summer, we're going to start on-site work but the main installation work will be in 2023. So, the plant will be in operation in 2024 as part of a full CCS value chain development in Norway called Longship, which is the greatest climate project in the Norwegian industry ever.

Cement is a special sector. It represents six to seven percent of global emissions. The emissions come from the cement process itself. So, the only way to remove CO2 completely is to implement CCS and therefore the experience from Brevik is crucial to decarbonize the cement sector. And as a company since we were awarded that contract, we have been contacted by specialists from all over the world. We have more than tripled the number of employees. We've had thousands of applications. Currently, we have 15 different nationalities in our company and we will continue to work with Universities and Research Institutes to further improve carbon capture solutions.

MATHIAS STECK     Many thanks to both of you to give us insights in these really promising projects. We have seen that in renewables at the beginning, that was more research and development case, but not financially viable. And then only after the LCOE came down and really rapidly increased. So, is the CCUS industry expanding quickly enough or may certain industries and jobs remain at risk if CCUS is not yet a viable solution for them?

VALBORG LUNDEGAARD     I would never say that the industry is accelerating fast enough because we need to act now. We cannot wait until the end of the decade. However, a lot is happening. According to IEA, since last year, the number of projects in operation and development more than doubled. A number of facilities in early stage more than tripled, just in a year. If you look again at IEA, to reach net zero, you need to capture 1.7 billion tonnes of CO2 by 2030 and 7.6 billion tonnes of CO2 by 2050. So, to put this in another way, the CC industry could grow to similar size of natural gas today.

So, I believe that more and more companies see that they need to decarbonize. But to most, it's a question of cost and benefits. Then in Europe, we have the EUA or the EU ETS. The price for this has increased tremendously. Last year, we almost reached 100 euro per tonnes of CO2. Now a couple of weeks ago, we see that now it's more costly to continue to pollute than to curb emissions, and that's really the whole point of the system. So, are industries at risk? I say yes, absolutely. If they do not act fast enough. Because my concern is that many companies believe that they can meet the targets for 2030 if they wait till 2029. But it's certainly too late, and that's why we are pushing all we can. There are a lot of good cooperation amongst various stakeholders to drive this industry further.

MATHIAS STECK     We have focused our discussion today on how existing labour markets can continue to be viable by rapid decarbonization, of course. But I'm also keen to look ahead and ask you about how CCUS will create a need for new skills. So as our final question today, can I ask you both what transferable skills are needed for the rapid development of CCUS and which existing industries are best placed to provide them? Let's start with Neri and then Valborg. OK?

NERI ASKLAND     OK, thank you, Mathias. So internally, we are utilizing the capabilities and workforce from oil and gas, offshore development towards developing offshore wind farms and also solar farms. The same happened with the associated construction and installation. It is the same workforce as oil and gas, and we also are increasing the shift of our workforce from oil and gas exploration towards low carbon solutions like hydrogen, ammonia or carbon capture, storage and transport. They all are just looking for storage for CO2 rather than oil and gas. So, the investments we are doing in Northern Light will require a huge workforce in the construction period and also a small or steady workforce in operation. This is for all these projects, that is a lot of the same competencies that will be needed and utilized. So, I'm kind of optimistic about the energy transition and the amount of jobs it will represent going forward. And I think the biggest opportunity for policymakers is to really show a clear path for supporting investments and job creation and protecting the communities they are in.

MATHIAS STECK     Thank you, Neri. Valborg, what is your take on this?

VALBORG LUNDEGAARD     Yeah, like for Neri. It's also, for me, easy to start with the experience from oil and gas, because that's my background. You know, for three decades, and there are a lot of advantages as already highlighted. And for us, for carbon capture plant, I would say the sound solutions, the signing light, compact modularized and so on, like we do for offshore installation. It's very, very valuable, but it shouldn't be underestimated. There are also disadvantages. You know, we come from a background with bespoke design, not standard solution fitted for mass production principles and quite stringent specification due to hydrocarbons. So, in addition to oil and gas, you know where the competence is certainly valuable. We have to look from other industries as well; process industry, infrastructure, project experience and from start-ups. I believe digitalization capability will be extremely important for this industry going forward. We are lucky to have some in-house companies in Aker that we work closely with in addition to external partners. And finally, we have to work with schools and universities so that their programmes are attractive to students who want to work with decarbonization and also attractive to the industry. We have to make sure that they see the need to shift their programmes right now to meet the demand for the future.

MATHIAS STECK     Many thanks to both of you Neri and Valborg and for your time today. It's been a pleasure talking to you and especially thank you for your very interesting insights you provided.

NERI ASKLAND     Thank you very much, Mathias.

VALBORG LUNDEGAARD     Thank you.

MATHIAS STECK     It was a privilege to hear firsthand insight from our guests today on exactly how clean energy innovations are protecting people's livelihoods. We also heard a lot of optimism there about how the growth of technologies like CCUS and green hydrogen would create a need for new skills and create jobs. Join us next week as we focus in more detail on transferring existing skills in support of decarbonization. To hear more podcasts in the series, please visit dnv.com/talksenergy.