Tender for Contract on subsidy for negative emissions carbon capture, transport and storage

The Agreement on the Danish Financial Act for 2022 introduced a new market based subsidy fund (the “NECCS Fund”) to achieve negative CO2 emissions by permanently and geologically storing biogenic or atmospheric CO2 (NECCS). The total maximum available subsidy of the NECCS Fund is DKK 2,559,200,000 (2023-prices) excl. VAT. The fund is scheduled for disbursement between 2025-2032. The granting of subsidy under the NECCS Fund is encompassed by the European Commission’s Guidelines on State aid for climate, environmental protection and energy 2022. The designation of the Contract(s) as a service contract in the contract notice, section II.1.3), etc. does not change this. The competitive bidding process was conducted as a procedure where all economic operators were invited to submit an offer, i.e. as an open procedure, and in accordance with the general principles of the Danish Public Procurement Act. Subsequently, the DEA cancelled the open procedure and transitioned to a negotiated procedure, see further below. The aim of the NECCS Fund is to contribute to the realization of Denmark's climate targets as outlined in the Danish Climate Act (Danish: “Klimaloven”). The NECCS scheme is intended as a multi-technology tender, covering all technologies that can provide negative CO2 emissions obtained through technological capture and permanent geological storage of biogenic or atmospheric CO2. By biogenic CO2, the DEA refers to CO2 created through the combustion, digestion, fermentation, decomposition or processing of non-fossil fuels or feedstock. By atmospheric CO2, the DEA refers to CO2 from the ambient air, not the emissions from energy or industrial plants. The NECCS Fund is not intended to provide subsidy for the capture and geological storage of CO2 from the combustion or processing of fossil-based fuels or feedstock. Negative emissions based on biochar created through pyrolysis of biomass, as well as other non-technological means of capturing and storing CO2, such as afforestation will also not be applicable for financial support under the NECCS scheme. The DEA wished to enter into one or more contract(s) pursuant to which the recipient(s) of the subsidies (each recipient “the Operator”) shall ensure and be responsible for capturing, transportation and permanent, geological storage of biogenic or atmospheric CO2 (“the Contract”). As described in the tender documents the Operator shall every year from 2026 until (and including) 2032 capture and permanently, geologically store a fixed quantity of biogenic or atmospheric CO2 (“Annual Quantity”). The Operator may also offer to capture and permanently, geologically store CO2 from start of operating until 31 December 2025 (“2025-Quantity”). These quantities are to be specified by the tenderer in the offer. The tender documents allowed for award of one or several Contract(s) dependent on the available funds based on the received offers. The subsidy will be paid per tonne of biogenic or atmospheric CO2 captured and permanently stored. The DEA has notified the fund to the European Commission as an aid scheme in accordance with the procedure prescribed by Article 108 of the Treaty on the Functioning of the European Union and has received the European Commission’s prior approval. The Contracts have been subject to a prior publication of call for competition in the Official Journal of the European Union, see contract notice no. 2023/S 165-521925 (521925-2023), published 29 August 2023, as amended by notice no. 692458-2023. Prior to the deadline for submission of offers in the open procedure the DEA made changes and clarifications to the tender documents. The changes and clarifications are described in notice no. 692458-2023 and the voluntary ex ante transparency notice no. 164771-2024, and the revised documents are also publicly available on the DEA’s website stated in the contract notice and this notice. After the deadline for submission of offers on 15 January 2024, the DEA assessed that all received offers received in the open procedure were non-compliant. This entailed that the DEA could not award and conclude Contract(s) based on the offers received in the open procedure. With the aim of ensuring the necessary basis for an early award of one or more Contract(s), the DEA cancelled the open procedure and proceeded to a negotiated procedure on 5 February 2024 in accordance with the Danish Public Procurement Act section 61(1), para 2, as only non-compliant offers had been submitted, see the Danish Public Procurement Act section 61(2), para 1. The DEA did not publish a new contract notice, see the Danish Public Procurement Act section 61(4). The DEA’s cancellation of the open procedure and transition to a negotiated procedure is further described in notice no. 79591-2024 and the voluntary ex ante transparency notice no. 164771-2024. The DEA’s justification for the abovementioned matters is stated in the voluntary ex ante transparency notice and also included in this notice. The DEA chose to publish the voluntary ex ante transparency notice in connection with the decision to award the Contracts with the wish to promote transparency regarding the changes and clarifications made to the tender documents in the open procedure and the DEA’s subsequent cancellation of the open procedure and transition to a negotiated procedure without publication of a new contract notice. This contract award notice concerns the result of the tender procedure and sets out that the DEA has entered into Contracts with BioCirc CO2 ApS, Bioman ApS and Carbon Capture Scotland Limited.