Market Design Options for CCS in Europe: CO2 Transport and Storage Regulation

In CERRE’s latest Issue Paper, Prof. Catherine Banet reviews the key tenets of the EU regulatory regime for CO₂  transport and storage infrastructures.

The paper highlights the necessity of reflecting on the evolving scope and the diversity of transportation modes in CCUS activities. It underscores the importance of a full value chain approach and a flexible, multi-modal approach to CO₂ transportation and storage.

The author identifies six building blocks for a future CCS market design: 1) transport network planning; 2) permitting of CO₂ transport and storage; 3) ownership and unbundling; 4) system operatorship; 5) access to transport and storage capacities; 6) regulatory oversight & dispute settlement.

Key policy recommendations include:

• Establishing legal definitions of key infrastructure types, such as for “CO₂ network” or ” CO₂ terminal”;
• Addressing the lack of alignment and coordination in the planning of different segments of the CO₂ value chain;

Determining the appropriate level of regulatory intervention for different transport modes at the EU level, ensuring a level playing field among EU and market actors;

• Facilitating the development of a flexible and multi-modal transportation system between the industrial clusters, the export infrastructures and the storage sites to ensure cost-effective and timely development of CCS value chains and risk mitigation;
• Clearly defining the role of the system operator, and adapting to the types of transport and storage infrastructure;
• Adopting a phased regulatory approach to the application of the full regulatory regime;
• Considering bundled transport and storage capacity offerings in the early stages of market development;
• Foreseeing the establishment of a legal basis for future network codes and guidelines for CO₂ transport and storage;
• Providing clarity on regulatory oversight, as well as dispute settlement mechanisms.