Norwegian energy company Equinor, a pioneer in carbon capture and storage (CCS), is scaling back its investments in CCS projects due to slower-than-expected market development and high costs. The company will withhold new investments until market conditions improve, returns are robust, and firm customers are in place.

Leadership and Historical Role in CCS

Equinor has been a leader in CCS technology, having developed the world's first offshore CCS project at the Sleipner field in the 1990s. More recently, it steered the Northern Lights project to a successful start-up and is a co-investor in the UK's first planned CCS project, Northern Endurance.

Market Development Challenges

The company's CEO stated that CCS markets are developing slower than anticipated. Key factors for this slowdown include:

• Delays in customer commitments, as companies that previously bought natural gas and inquired about hydrogen and CCS have now postponed their own emission reduction targets beyond 2030.
• A lack of urgency compared to a few years ago when widespread 2030 targets created more customer focus on rapidly establishing the market.
• Difficulty in securing long-term contracts due to varying post-2030 targets, making it hard to collect enough committed CO2 volumes.
• Slowed progress in licensing, support regimes, and applications for capturing CO2, despite improvements in laws for CO2 transport and storage.

Financial Impact and Strategic Repositioning

As part of a broader capital expenditure reduction, Equinor will cut $4 billion from its 2026 and 2027 spending. A significant portion of these cuts is allocated to its low carbon solutions and power projects segment, which is dominated by CCS, hydrogen, and ammonia initiatives. The company's strategy is now to position itself to invest as markets develop, rather than leading with upfront capital.