Carbon capture in Oslo becomes a reality!

Hafslund Celsio has decided to resume the carbon capture project at Klemetsrud in Oslo. Together with Aker Solutions and SLB Capturi, they will build one of the world’s first full-scale carbon capture facilities at a waste-to-energy plant. The facility is expected to be operational by the third quarter of 2029.

“This is an important milestone. I am proud that we are now ready to resume the realisation of one of Norway’s largest and most important climate and industrial projects, which is also critical for ensuring the long-term competitiveness of waste incineration and district heating in Oslo,” said Martin S. Lundby, chief executive officer at Hafslund Celsio. “The decision marks that the Norwegian government, the City of Oslo, and Hafslund Celsio’s owners – Hafslund, Infranode, and HitecVision – are ready to commence construction of the carbon capture facility and a CO2 terminal at the Port of Oslo,” Lundby continues.

“Carbon capture at Klemetsrud will cut nearly 20 percent of the city’s remaining fossil emissions when the facility starts operating in 2029, making it the most important single measure for Oslo to reach its ambitious climate goals. Oslo is large enough to take on projects that other Norwegian cities cannot, while still being small enough to test entirely new solutions that larger cities around the world can benefit from,” said Governing Mayor of Oslo, Eirik Lae Solberg.

The carbon capture facility announced today will capture 350,000 metric tonnes of CO2 annually, with approximately 50 % resulting in permanent carbon removal from the atmosphere and 50 % being reduction in fossil fuel emissions. As part of the national Longship project, the captured CO2 will be transported and permanently stored by Northern Lights JV under the seabed on the Norwegian Continental Shelf. This will help reduce emissions from the incineration process in line with Oslo’s climate strategy for 2030.

Partnership

Hafslund Celsio has entered into an agreement with Aker Solutions AS and SLB Capturi Norway AS, which have established a partnership and will jointly act as the project’s suppliers.
“We are pleased to have Aker Solutions and SLB Capturi collaborating with us on this significant industrial project,” stated Lundby.
“Working with reputable partners who possess extensive experience in carbon capture and storage from the Longship project provides us with security and strength. Our partners bring valuable expertise from large industrial developments both in Norway and internationally. Together, we will construct a carbon capture solution that is expected to be operational by third quarter 2029,” Lundby continued.

“Today marks a significant milestone for Aker Solutions and the CCS industry in Norway. We are proud to be part of this key project and look forward to contributing with our effective project execution, based on three decades of experience in the CCS market. This project is a testament to important public and private collaboration to build an industrial value chain for carbon capture and storage. The project will also significantly contribute to reducing emissions and will create value for both industry and society,” said Kjetel Digre, CEO for Aker Solutions.

“Standardization and modularization play a key role in shifting the economics of carbon capture projects,” said Egil Fagerland, chief executive officer, SLB Capturi. “We are extremely proud of our collaboration with Hafslund and Aker Solutions to align our Just Catch plant design with the techno-economic requirements of this project to help make it a reality. We look forward to delivering this flagship project as a successful blueprint for industrial decarbonization projects in Norway and across the globe.”

The joint venture will establish a carbon capture facility at Klemetsrud in Oslo, which will capture 90% of all CO2 in the flue gas from the waste-to-energy plant. A local logistics solution will prepare the captured CO2 for emission-free transport to the Port of Oslo, where a CO2 terminal will be built. Northern Lights will collect the captured CO2 and transport it to their terminal in Øygarden near Bergen. From there, the CO2 will be permanently stored below the seabed in the North Sea. In the future, this terminal will also offer intermediate storage and shipping services for CO2 from other carbon capture projects in Eastern Norway, thus enabling further CCUS projects.

Longship and funding

“I am pleased that this climate project is back on track. CO2 capture is necessary to reduce emissions from this type of facility. A successful project at Klemetsrud will demonstrate the value of CO2 capture from waste incineration both nationally and internationally”, said Minister of Energy Terje Aasland in conjunction with the signing of the state support agreement.

“We are proud of the trust shown by the Government and Norwegian Parliament, the city of Oslo, and other authorities in this industrial project. As part of the Norwegian government’s Longship demonstration project, the Norwegian government, Oslo municipality, and Hafslund Celsio are working together to realise one of the world’s first full-scale carbon capture facilities for waste-to-energy. Of Europe’s 500 waste-to-energy plants, more than 60 CCUS projects are following the development of this pioneering project in Oslo.

“We aim to demonstrate to other cities in Norway and internationally how fossil CO2 emissions from responsible waste management can be reduced and contribute to large-scale CO2 removal”, says Lundby.

The project budget (P50) for the realisation of Hafslund Celsio’s carbon capture facility is set at NOK 8.3 billion (2024-value). The maximum cost budget (P85) is set at NOK 9.5 billion (2024-value). Through the support agreement, the Norwegian government will provide NOK 2.5 billion in investment support (Capex). Additionally, there will be support for operations, transport, and storage over ten years. Oslo municipality will invest NOK 2.6 billion directly through preference shares in Hafslund Celsio, while Hafslund Celsio will invest NOK 4.3 billion. The cost budget has increased by approximately NOK 2.1 billion (2022 kroner) since the project began in 2022, but the project has reduced costs by approximately NOK 1 billion since entering a cost-reduction phase in April 2023.

Investment costs 2025

Cost framework P85
State support agreement NOK 2,5 billion.
Municipality of Oslo NOK 2,6 billion.
Hafslund Celsio NOK 4,3 billion.
Total NOK 9,5 billion

The state support of NOK 4.4 billion (2024-value) consists of investment and start-up grants as well as support for operations, transport and permanent storage in the contract period.

In addition to removing fossil CO₂, the facility will also capture CO2 released from the combustion of biogenic material, permanently removing CO2 from the natural carbon cycle. This creates the opportunity to sell carbon removal certificates (CDR) in the voluntary carbon removal market (VCM), which is experiencing strong growth. Once the facility is operational and the captured CO₂ is permanently stored by Northern Lights, this will become a significant source of revenue, essential for financing the company’s own contribution and ensuring that this is a profitable project for Hafslund Celsio.

Final Investment Decision
On Friday, 24 January, Hafslund Celsio’s Board of Directors made the final investment decision for the realisation of the carbon capture project. On Monday, 27 January, the state support agreement and the agreement with SLB Capturi and Aker Solutions were signed.

Key Facts:

  • On 28 June 2022, the Board of Hafslund Oslo Celsio made an investment decision to realise the carbon capture project at Klemetsrud in Oslo.
  • On 29 June 2022, the company signed the state support agreement and became part of the Longship project.
  • On 26 April 2023, the carbon capture project entered a cost-reduction phase due to a significant increase in cost estimates.
  • On 23 October, the Oslo City Council decided on its share of the funding.
  • On 18 December 2024, the Norwegian Parliament approved the government’s proposal for an adjusted state support agreement.
  • On 24 January 2025, Hafslund Celsio’s Board of Directors made the final investment decision to establish a carbon capture project at the waste-to-energy plant at Klemetsrud in Oslo.
  • On 27 January 2025, the company signed an agreement with Aker Solutions AS and SLB Capturi Norway AS in a joint venture to implement the project.
  • The carbon capture facility will remove 350,000 tonnes of CO2 This will be permanently stored by Northern Lights through the Longship project, Hafslund Celsio is guaranteed storage capacity for 10 years.
  • The facility will be operational by the third quarter of 2029.