Building a CO2 transport infrastructure for Europe

About the report

This report argues that developing a CO₂ transport infrastructure for Europe must start now – ahead of wide-scale deployment. Clusters, places where different CO₂ sources are located in close proximity, will especially benefit from such a development. Hence, ZEP calls for the following actions:

• Broaden the scope of the Energy Infrastructure Package
• Ratify the OSPAR and London Protocol amendments

Executive summary

CCS is on the critical path to deliver the EU Energy Roadmap 2050

The critical role of CO₂ Capture and Storage (CCS) in decarbonising Europe cost-effectively is now indisputable: it can not only deliver substantial emission reductions across a range of industries, but
also provide the catalyst for economic growth – creating and preserving jobs. Indeed, in some industries, such as steel and cement, it is the only means of achieving deep emission cuts. Combined with sustainable biomass, CCS can even remove CO₂ from the atmosphere – already recognised as a significant and attractive abatement solution.

Crucially, CCS can also complement intermittent renewable energy sources with low-carbon, baseload, and balancing generation. As a key enabler in the shift to a green economy, CCS is therefore central to every energy scenario of the EU Energy Roadmap 2050.

CCS is on the critical path a,nd there is no doubt it can deliver, as shown by international developments
where the final investment decision (FID) has already been taken on large-scale demonstration projects
worldwide. However, current policy measures in Europe have so far failed to deliver large-scale CCS
demonstration at the speed and scale required: there was deep disappointment that none was selected in
the first tranche of the ‘NER 300’3 – even though it was set up expressly to “help stimulate the
construction and operation of up to 12 commercial (CCS) demonstration projects” (Article 10a.8, EU ETS
Directive).

The window of opportunity is vanishing fast. Additional, short-term policy action is therefore vital to
keep CCS on track to deliver the EU Energy Roadmap – keeping pace with that of well-advanced projects.

Developing a CO₂ infrastructure must start now – ahead of wide-scale deployment

Large-scale CCS requires the development of a transport infrastructure on a scale comparable to that of the current hydrocarbon infrastructure, capable of transporting hundreds of millions of tonnes of CO₂ every year – from power plants and industrial sectors to suitable storage sites, EU-wide.

If different CO₂ sources are located in close proximity, they can share both CO₂ transport and storage
infrastructure, thus benefiting significantly from economies of scale. Such clusters will also act as the
launch pads for wider deployment by providing practical experience in the design and operation of shared CO₂ infrastructure.

However, both transport and storage infrastructure have very long lead times: characterisation of storage
sites can take between 6 and 10 years, while transport infrastructure involves addressing a wide range of
stakeholder interests, which itself can take between 6 and 10 years. This process will take even longer in
Member States without strong planning legislation and/or the requisite national laws to confer rights for the development, ownership, and operation of CO₂ infrastructure. Early strategic planning is therefore vital, with any cross-border restrictions removed.

The European Commission and Member States must provide a clear signal for investment

It is essential to investor confidence that both the European Commission (“the Commission”) and Member
States demonstrate a clear, credible commitment to CCS, aligned at all levels of Government. This includes ensuring it is fully represented in the Energy Infrastructure Package; undertaking urgent, structural reform of the EU carbon market; and establishing additional economic measures at the national level.

National CCS Master Plans must also be established, with concrete arrangements for spatial planning and
land use coordination (including the orderly transition of pore space from petroleum production to CO₂ storage). As part of a coordinated approach to pan-European CCS infrastructure development, this will
ensure a level playing field for investors and the most effective long-term solutions.

Key actions to be taken as a matter of urgency

To overcome or reduce existing barriers and accelerate the development of a CO₂ infrastructure,
ZEP therefore recommends that the following actions be taken as a matter of urgency:

1. Broaden the scope of the Energy Infrastructure Package to a) support the development of CCS
   transport infrastructure and b) include CCS infrastructure located wholly in one Member State, as this
   will contribute significantly to the future deployment of CCS in Europe. (A CCS project of “Common
   Interest could be defined as one that involves the creation of CO₂ transport infrastructure with
   additional spare capacity beyond the needs of the first demonstration capture plant.)
2. Establish short-term incentives in addition to the EU ETS to make CO₂ infrastructure more
   attractive to investors, including:
   • Special support to de-risk transport investment for first movers
   • Funding towards the development of CO₂ infrastructure (transport and storage) in its own right, i.e., the funding instrument should not be tied to the identity of any given capture plant. However, tying funding to specific storage site(s) should be considered.
   • Strategic support for CCS projects of Common Interest that provide CO₂ transport and/or storage infrastructure with additional spare capacity beyond that required for any given first end-to-end demonstration project.
3. Ensure consistent transposition of the CCS Directive by Member States in order to reduce investment risks. Third-party access requirements should be initially waived for the transport infrastructure element of projects until regulatory clarity on this issue is achieved. Projects that receive public funding (e.g., for providing additional capacity above the project’s need) should be excluded from this waiver.
4. Ratify the OSPAR and London Protocol amendments as a matter of urgency. Pending these ratifications, ZEP supports the IEA’s working paper on options under international law to enable transboundary movement of CO₂ for sub-seabed storage.