Skip to content

News

Carbon capture, storage and utilisation

Bioenergy

Biomass

Ørsted and Microsoft strikes deal to remove one million tonnes of carbon

Building on an existing commitment, Ørsted has agreed to supply Microsoft with one million tonnes of carbon removal over ten years from Avedøre Power Station, a part of the bioenergy carbon capture and storage (BECCS) project ‘Ørsted Kalundborg CO2 Hub’.

Photo credit: Ørsted

image
27 May 2024

Discover carbon capture, utilisation and storage (CCUS)

Learn more about picking the high-hanging fruits of CO2 mitigation in this white paper about carbon capture, utilisation, and storage.

Discover the publication

In a landmark deal, Ørsted will sell a further one million tonnes of carbon removal over a ten-year period to Microsoft from Avedøre Power Station, which is part of the bioenergy carbon capture and storage (BECCS) project ‘Ørsted Kalundborg CO2 Hub’. This new agreement builds on an existing commitment by Microsoft to buy 2.67 million tonnes from Asnæs Power Station, bringing the total purchase under contract to 3.67 million tonnes of CO2.

As part of the ‘Ørsted Kalundborg CO2 Hub’, Ørsted will establish carbon capture at its wood chip-fired Asnæs Power Station in Kalundborg in western Zealand and at the Avedøre Power Station’s straw-fired boiler in the Greater Copenhagen area. The 430,000 tonnes per year of biogenic CO2 from the combined heat and power plants will be shipped to a storage reservoir in the Norwegian part of the North Sea and stored permanently. The ‘Ørsted Kalundborg COHub’ is set to become operational by the beginning of 2026.

The new agreement between Ørsted and Microsoft entails that Microsoft will take one million tonnes of carbon removal from the straw-fired unit at Avedøre Power Station starting in 2026. The combined heat and power plant converts locally sourced straw, which is a by-product of agriculture, into electricity and district heating. By capturing the biogenic carbon from biomass-fired combined heat and power plants and storing it underground, it is possible to not only reduce, but also remove CO2 from the atmosphere, as biogenic carbon from sustainable biomass is part of a natural biogenic carbon cycle. Thereby, you create negative emissions.

The collaboration between Ørsted and Microsoft will play a vital role in developing the ‘Ørsted Kalundborg CO2 Hub’, as bioenergy-based carbon capture and storage is still in its early stages. Even though the project was awarded a subsidy from the Danish Energy Agency, the revenue from the sale of carbon removal certificates was included before the investment decision and then in the offer submitted through the Danish subsidy scheme, which put great emphasis on competitive offers with the lowest amount of subsidy per tonne.

According to the UN’s Intergovernmental Panel on Climate Change’s (IPCC) latest report, carbon removal technologies such as BECCS are crucial for limiting global warming. This underscores the importance of projects such as the ‘Ørsted Kalundborg CO2 Hub’, which can support companies like Microsoft in achieving their sustainability goals and contribute to achieving the global climate targets.

“This expanded collaboration with Microsoft is a testament to our shared vision for a sustainable future. By combining Ørsted’s expertise in bioenergy carbon capture and storage with Microsoft’s commitment to reducing its carbon footprint, we’re showcasing how strategic relations can accelerate the transition to a greener economy.”  Ole Thomsen, Senior Vice President and Head of Ørsted’s Bioenergy business

For Microsoft, the agreement represents another large-scale carbon removal deal towards the company’s aspiration to be carbon-negative in 2030.

“We’re proud once again to announce a landmark offtake agreement with Ørsted, which is pioneering responsible carbon removal development in Denmark while also meeting the needs of a decarbonised energy system. The urgency around climate goals means translating great planning into rapid action – and Ørsted remains a valuable collaborator in bringing big ideas to life. Today’s announcement is yet another tangible step towards building the technologies and commercial capabilities towards becoming carbon-negative by 2030.” Brian Marrs, Senior Director of Energy & Carbon Removals at Microsoft

Related case: CORT: Improving the efficiency of carbon capture technologies

Facts about ‘Ørsted Kalundborg CO2 Hub’: 

  • In May 2023, the Danish Energy Agency (DEA) awarded Ørsted a 20-year subsidy contract for its carbon capture and storage (CCS) project ‘Ørsted Kalundborg CO2 Hub’.
  • Ørsted will establish carbon capture at the wood chip-fired Asnæs Power Station in Kalundborg in western Zealand and at Avedøre Power Station’s straw-fired boiler in the Greater Copenhagen area.
  • Ørsted will capture 150,000 tonnes of biogenic CO2 per year from the straw-fired unit at Avedøre Power Station. The CO2 will initially be transported by lorry to Asnæs Power Station until an improved COinfrastructure can be established.
  • The straw-fired unit at Avedøre Power Station converts locally sourced straw into electricity and district heating. The straw is a by-product of agriculture.
  • Ørsted will capture 280,000 tonnes of biogenic CO2 per year from the wood chip-fired unit at Asnæs Power Station, which will also function as a CO2 hub, handling and shipping biogenic CO2 from both the Avedøre and Asnæs combined heat and power stations to the Northern Lights storage reservoir in the Norwegian part of the North Sea.
  • The wood chip-fired unit at Asnæs Power Station converts wood chips from primarily the Baltics into electricity, district heating, and process steam for the local industry. The wood chips come from sustainably managed production forests and consist of residues from trimming or from crooked trees.
Read more about the partnership

You should consider reading

Bioenergy
Biomass
Carbon capture, storage and utilisation

News

Green Shipping

+10

New publication explores Denmark’s push to decarbonise global shipping

5 December 2023
As climate and energy leaders gather at COP28, a newly launched publication highlights Denmark’s commitment to accelerating the global transition towards climate-neutral shipping.

News

Resource efficient production

+12

New white paper on transforming global food systems for a more sustainable and resilient future

8 December 2023
Launched at COP28, a new white paper by State of Green examines pathways toward a resilient, resource-efficient and decarbonised agrifood system.

News

Climate COP

+30

COP28: New global alliance to advance negative emissions

11 December 2023
It is not enough for all countries to aim for climate neutrality; some must go beyond and become climate-negative. Aimed at achieving this after 2045, Denmark has launched the GONE alliance with like-minded countries.

Perspective

Power-to-x

+13

Green hydrogen derivatives for deep decarbonisation

19 September 2023
Hydrogen is an important enabler for the production of hydrogen derivatives, such as e-methanol, e-ammonia, and e-kerosene, which can be used in industry and transport.