SEPTEMBER 5, 2019 / 7:29 AM

OSLO (Reuters) – Norway’s Equinor signed preliminary agreements on Thursday with seven potential industrial customers for its project to develop carbon dioxide storage under the North Sea, a crucial step toward securing state funding.

The project, called Northern Lights and led by Equinor in partnership with Shell and Total, is part of the country’s efforts to combat climate change.

Proponents of carbon capture and storage (CCS) say countries need the technology to help fulfill pledges made on the heels of the breakthrough Paris climate change agreement in 2015.

Environmentalists worry the costly CCS technology will perpetuate the fossil fuel status quo when rapid and deep cuts in energy use are needed to limit global warming.

The world’s leading metal producer ArcelorMittal, cement producer Heidelberg Cement, Sweden’s largest, privately-owned refiner Preem are among the firms who signed the memorandums of understanding (MoUs) on Thursday.

The Norwegian government said the industry’s commitment would be crucial for it to decide on whether to invest in the project, which aims at capturing and storing up to 5 million tonnes of CO2 from various industrial sites onshore.

“The signing of the MoUs are the right step in that direction,” Norway’s Oil and Energy Minister Kjell-Boerge Freiberg said at a press conference. “You’ve shown that a larger CCS network in Europe is possible.”

Preliminary estimates from 2016 showed it could cost between 7.2 billion Norwegian crowns ($801.7 million) to 12.6 billion crowns to establish a full CCS chain, including CO2 transportation by ships from two onshore sites in Norway, and the subsea storage.

So far, Norway has spent 825 million Norwegian crowns to develop the full-scale CCS project, which also involves building carbon capture facilities at onshore industrial sites in Norway.

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