Michael Bell/AP Save for later Print Download Share LinkedIn Twitter This week’s agreement partnering Dutch fertilizer giant Yara with the Northern Lights carbon capture and storage (CCS) project off Norway deserves its milestone attention, in our view. Viable CCS hub development depends on partnerships, and building CCS into a revenue-generating business will require taking those partnerships beyond the conventional oil and gas orbit. In fact, deals like Yara will likely make or break corporate CCS targets that reach beyond modest internal decarbonization goals.A deal to transport CO2 from one country to another may seem mundane in the globally commoditized world of oil and gas, but for CCS, it is a crucial first. Proponents have emphasized that CCS needs far more than fiscal incentives to become a material contributor to global decarbonization — sufficient regulatory, permitting and legal frameworks are also required. The successful negotiation of Yara’s cross-border transfer of CO2 for storage demonstrates the maturation of these supports, at least in Europe.Successful partnerships across industries — and potentially geographies — will be required for CCS hubs to work efficiently. While individual companies can integrate their oil and gas value chains across broad distances and complexities, commercial CCS will require more collaboration. CCS could tap cross-industry support from hard-to-decarbonize sectors such as steel, cement and chemicals, but those opportunities could also quickly fade should alternate “green” solutions break through crucial cost barriers.Still, few companies produce enough carbon in a single place to feed industrial-scale CCS, potentially aligning interests around CCS-as-a-service fed hubs, for now. Such hubs like Teesside, the Port of Rotterdam and the Houston Ship Channel require linking multiple industries into a single system to reach economies of scale. In Europe, projects may require linking multiple countries to reach that scale and bring down costs. Cognizant of this, the Norwegian government — which is funding 80% of Northern Lights — stipulated to project partners Shell, Equinor and TotalEnergies that they develop a commercial business model that extends services to the rest of Europe.Proven commercial models are still needed if CCS is going to expand beyond projects backed by significant government funding. Companies from US E&Ps Talos Energy and Denbury to majors led by Exxon Mobil have talked about developing CCS as a service, but CCS contracts that do not rely on the economic uplift of enhanced oil recovery remain rare. Such arrangements will be necessary to show investors that CCS can shift from an emissions mitigation strategy to a viable transition business. Banks will also need long-term contracts to extend project financing for world-scale CCS facilities — just as they do on LNG.Major producers expect to rely on CCS for decarbonization with varying effect but all have it in their plans and with good reason. The limitations — and controversies — surrounding nature-based offset solutions are becoming more apparent. Achieving net-zero emissions while still maintaining oil and gas production necessitates some form of offset. Otherwise, preserving those targets will mean a further — or complete — retreat from hydrocarbons.