Letter of intent for the development of a carbon capture and disposal facility in Straumsvík

Foundation laid for a new industry based on Icelandic ingenuity and technology

Carbfix, Coda Terminal, the Municipality of Hafnarfjörður and Rio Tinto in Iceland signed a letter of intent today for the development of a carbon capture and disposal facility in Straumsvík, to be called Coda Terminal. The project lays the foundation for a new industry in Iceland, based on Icelandic innovation, which could become an important export sector as well as supporting Iceland's climate goals. The first phase of the facility is scheduled to begin operations in 2026, with full capacity to be reached in 2031. Once fully built, the facility will be able to receive and sequester around 3 million tonnes of CO2 annually, which is equivalent to more than half of Iceland's annual emissions.

One of Europe's most promising major climate projects 

The goal of limiting global warming to 1.5 degrees is unlikely to be achieved without large-scale CO2 capture and disposal. Carbfix has developed a technology that mimics and accelerates natural processes to bind CO2 in underground rock formations, which involves mixing it with water and pumping the carbonated water („soda water“) down into basalt rock formations, where the CO2 reacts with metals in the rock and is permanently converted into minerals. The method has been successfully applied at Hellisheiði since 2012 and has attracted worldwide attention. The Coda Terminal station will be the first of its kind in the world. Earlier this year, the project was recognised as one of Europe's most promising large-scale climate projects, receiving a grant of approximately 16 billion króna from the European Innovation Council, following a thorough review by the fund. This is almost a third of the project's estimated total cost. The project involves developing efficient transport routes for CO2, from capture in Europe to injection in Straumsvík. In Iceland, there are ideal conditions for permanent, environmentally friendly, cost-effective and safe carbon disposal using the Carbfix method, the main prerequisites for which are the presence of CO2, water and suitable geological formations.

The plant will also be a cost-effective way for Icelandic parties to reduce their carbon footprint. Rio Tinto in Iceland is among them and will work to capture CO2 from the aluminium smelter for on-site disposal. This would be the first time CO2 from an aluminium smelter has been permanently disposed of, and would be an important step towards carbon neutrality by 2040. In November, Carbfix began exploratory drilling on the Rio Tinto site in Iceland at Straumsvík, with the aim of increasing knowledge of the area's geological formations and obtaining more detailed information about the conditions for the permanent sequestration of CO2 in the subsurface using the Carbfix technology. A screening plan for the project's environmental assessment was recently submitted to the Planning Authority.

Landmark project

Rósa Guðbjartsdóttir, Mayor of Hafnarfjörður: “It is interesting to follow the progress and development of the project, and we welcome that a location has been found for the station in Hafnarfjörður. If all goes to plan, the project will not only deliver significant environmental benefits but also create new, diverse jobs in Hafnarfjörður and unlock even more innovation, ingenuity and technology in a town that is already home to a number of tech companies. The opportunities are significant, but the City of Hafnarfjörður will emphasise providing detailed information and ensuring good consultation with residents, businesses and others in the municipality throughout the entire project process.”

Edda Aradóttir, Managing Director of Carbfix: “The latest scenarios show that the world's climate goals will not be met without large-scale CO2 capture and disposal. We have developed a cost-effective, sustainable and environmentally friendly method for this and have applied it successfully at Hellisheiði for ten years. Coda Terminal is our largest project to date and will be a milestone, not just for those directly involved but for climate action in Iceland in a wider context, along with the economic benefits of a ten-billion investment. Greenhouse gases in the atmosphere respect no borders, and cross-border cooperation is an absolute prerequisite for achieving the climate goals. Alongside further entrepreneurial activity within Coda Terminal, we continue to work on establishing the Carbfix method in more places around the world, as there is a great demand for the implementation and development of cost-effective, permanent and safe climate solutions such as the one we offer.”

Grettir Haraldsson, Chairman of Coda Terminal: „The signing of this letter of intent is an important step towards Icelanders contributing significantly to the global effort to combat climate change.”

Rannveig Rist, Managing Director of Rio Tinto in Iceland: “Good progress has been made in recent years in reducing emissions from ISAL, and the company's carbon footprint is already among the lowest in the aluminium industry. However, decisive steps must be taken if our ambitious 2040 carbon neutrality targets are to be met. The capture and disposal of CO2 using the Carbfix technology at the Coda Terminal is one such opportunity, which is why Rio Tinto signed a letter of intent with Carbfix last year. Trials have already begun on capturing CO2 from the operation, and we are determined to become the first aluminium smelter in the world to capture and permanently dispose of a portion of its carbon emissions.”

Information website about the project: www.carbfix.com/is/codaterminal

Further information is provided by:

• Árdís Ármannsdóttir, Communications Manager for the City of Hafnarfjörður, telephone: 664-5521 | email: ardis@hafnarfjordur.is
• Ólafur Teitur Guðnason, Communications Manager, Carbfix, telephone: 856-3535 | email: olafurtg@carbfix.com
• Bjarni Már Gylfason, Information Officer for Rio Tinto in Iceland, telephone: 854-1337 | email: bjarni@isal.is