Dutch regulator: Shell and TotalEnergies can collaborate on CO2 storage

The Netherlands Authority for Consumers and Markets (ACM) has given approval to competitors Shell and TotalEnergies to collaborate on CO2 storage in empty natural-gas fields in the North Sea.

Shell and TotalEnergies plan to store CO2 on a large scale as part of the Aramis project, collaborating with the government, Gasunie and Energie Beheer Nederland (EBN) to build a high-capacity trunkline that connects to empty gas fields, among other activities.

Following an assessment of their plans, ACM has decided that as cooperation is necessary for getting the initiative off the ground and for realizing climate benefits, the “slight restriction of competition between Shell and TotalEnergies is not that harmful”.

According to ACM, the two companies need to offer CO2 storage together and therefore jointly set the price with an eye to putting the first ±20% of the trunkline’s capacity into operation, while no collective agreements will be made for the remaining 80%.

The Dutch authority has come to the conclusion that collaborations between two competitors may negatively affect price, quality, and innovation, but that effect can be offset by certain benefits for the customers of those businesses and for the whole society.

Therefore, the parties asked ACM for informal guidance about whether their collaboration is compatible with the competition rules that offer an exemption to the prohibition to restrict competition if, in short, the benefits outweigh the costs.

ACM sees that a new market is created through this project and the launch phase where Shell and TotalEnergies collectively offer their storage facilities is followed by a large-scale and commercial phase where other companies that operate empty gas fields can also connect to the trunkline.

In the assessment, ACM examined whether the two companies would have been able to reach the same result individually and concluded that collaboration is necessary for making the project a success.

The benefits for customers and society is said to exceed the costs of the restriction of competition. In that context, it is important that competition is not restricted for the remaining 80% of transport and storage capacity.

That is why, according to ACM, the companies are allowed, under both Dutch and European competition rules, to restrict their mutual competition when selling the first 20% of the transport and storage of CO2 in their empty gas fields.

Aramis is one of two planned carbon capture projects in the Netherlands, with the second being Porthos – Port of Rotterdam CO₂ Transport Hub and Offshore Storage.

The project, announced in July 2021, involves developing new CO2 transport infrastructure to enable offshore CO2 storage and is based on an ‘open access’ philosophy to give industrial customers and offshore storage providers the possibility to connect to the infrastructure at a later stage.

Partners behind Aramis plan to take a final investment decision by 2023 with an operational start-up in 2026, and aim at a synergistic relationship with the Porthos project.

Register for Offshore Energy Exhibition & Conference: