Up to one-quarter of Europe's polluting carbon dioxide emissions could be stored under the central North Sea given its "geologically near-perfect" environment, a study led by Edinburgh University and Scottish Enterprise said.
Peterhead has been identified as central to the potential development with the local economy benefiting by some £140 million should carbon and capture storage (CCS) be developed there. It has been proposed that the harbour town could become a key location for the shipment of captured CO2 from other parts of the UK and Europe, before it is taken to storage sites in the sea.
By 2050, as much as 500 metric tonnes of CO2 – the equivalent of 25% of the European Union's power and industrial emissions in 2007 – could be stored.
The report sets out a number of possible scenarios for the future of carbon capture and storage, which the study concludes is the only technology on the horizon that would allow industrial sectors, such as iron and steel, cement and natural gas processing to meet emissions reduction goals.
The report's main author, Stuart Haszeldine, professor of Scottish Carbon Capture and Storage at Edinburgh University, said: "It's important to look at what we get for our public support of CCS funding. Ideally we want low-cost projects now, which help us to keep jobs, and we want projects which can extend rapidly while reducing difficulties. The central North Sea offers all of that security, in well-understood and well-supported industries."
The report shows how the oil and gas industry of the central North Sea would provide significant lengths of existing subsea pipelines and offshore platforms for CO2 injection into depleted oil fields. New pipelines would link clusters of capture plants in the Forth Estuary, Teesside and Yorkshire but CO2 would also be shipped to a deepwater port enabling large-scale import of the environmentally harmful gas.
Scotland's large carbon-intensive industries such as Grangemouth Refinery, Mossmorran Ethylene and Dunbar Cement, would benefit from a Peterhead location, it has been claimed.
Energy Minister Fergus Ewing welcomed the report. "CCS technology has the potential to transform the way we generate power and make an important contribution to Scotland's low-carbon future and Scotland is well-placed to take a lead in its development and commercialisation," he said.
David Rennie, Scottish Enterprise's director of oil and gas, thermal generation and CCS, said: "The offshore geography of the central North Sea gives us an unique advantage in developing CCS capabilities which has huge potential for the Scottish economy."
CCS development of this scale in the north-east could mean that by 2030 new gas or coal plants will have been developed on existing brownfield sites at Cockenzie and Longannet with minimal marginal cost, given carbon storage could be handled off-site.
A pioneering CCS project at the Longannet power station in Fife was cancelled last October. It followed the collapse of a £1 billion competition which was launched in 2007 by the then Department for Business, Enterprise and Regulatory Reform to design, construct and operate the UK's first commercial-scale carbon capture and storage project. The National Audit Office concluded the competition had been a high-risk and challenging undertaking launched with insufficient planning and recognition of the commercial risks.
The Department of Energy and Climate change is now running another competition. It offers £1bn in direct funding support for the design and construction of CCS projects also able to benefit from the reforms being made to the electricity market to bring forward investment in low-carbon electricity generation.