A probabilistic appraisal of Project Greensand: Economic viability of offshore geological CO₂ storage under uncertainty

This study presents an economic appraisal of Project Greensand in the Danish North Sea, a leading offshore CO₂ storage initiative that conducted injection pilot tests in 2023 and is slated for further development. Deterministic results indicate that, at concurrent CO₂ prices in the EU Emissions Trading System (ETS) of approximately $75.6/t, Greensand will be unprofitable, with a negative cumulative cash flow of about $6 million over its 10-year injection period. However, when considering certain price guarantees, the effective CO₂ price rises to ∼$113/t, which significantly increases the internal rate of return (IRR) to ∼21.8% , thereby surpassing the 15% hurdle rate for minimum return on investment. A subsequent probabilistic cash flow analysis revealed a pronounced downside risk profile, with a median IRR of 12.9%. Only under favorable assumptions of uncertain input parameters will the IRR exceed 15%. Our findings establish reference conditions for the price boundaries required to make offshore geological carbon storage (GCS) projects like Greensand bankable. Further sensitivity analyses of outcomes to variability in input parameters confirm that well and platform operating expenditure, shipping capital expenditure, and all-in revenue are the dominant value drivers. Likewise, the methodology employed in this study emphasizes the importance of probabilistic appraisal to adequately capture risk and uncertainty when developing and implementing effective policy support mechanisms for the early deployment of offshore GCS projects.