Three steps are to be considered in the value chain of CDR approaches requiring CO₂ transport and storage:

• extraction from the air – or “capture”;
• conversion and transport – which can be done through pipelines, shipping, rail, or trucking and can be combined with liquefaction at conversion terminals;
• storage, also referred to as sequestration, often performed in suitable underground geological formations, but can also be done through underground mineralisation or used in long-lived products.

Figure 1: The various ways to transport and store CO₂, Carbon Gap, 2024

While CDR pathways such as afforestation or soil carbon sequestration do not require the construction of CO₂ infrastructure, several high-durability pathways do, such as bioenergy with carbon capture and storage (BECCS) and direct air carbon capture and storage (DACCS). These technologies rely on the development of a CO₂ value chain which includes transport and storage infrastructure. Importantly, CO₂ transport and storage applies to several CDR methods and to carbon capture, utilisation and storage (CCUS), which involves capture technology applied at emissions sources like cement plants. CCUS reduces emissions from a facility rather than removing carbon that has already accumulated in the atmosphere.

In Europe, a CO₂ storage hub is emerging in the North Sea region, where Norway and the United Kingdom are leading in terms of planned capacity. Norway is also home to the longest-running CO₂ storage site in the world in the Sleipner field, which has stored about 1 MtCO₂/year captured from natural gas plants since 1996. In an effort to scale storage capacity, the EU, through the Net Zero Industry Act, has set a target to develop a yearly CO₂ storage capacity of 50 MtCO₂ by 2030 (to be confirmed by the co-legislators in Q1 2024).

The United States also has experience in this realm, mainly in Texas and neighbouring states, with CO₂ being transported by pipeline and stored underground since the early 1970s through enhanced oil recovery (EOR), which produces oil while storing CO₂. EOR – a divisive practice among climate advocates – constitutes the bulk of the United States’ experience with the transport and sequestration of CO₂ and can provide learnings for dedicated geologic sequestration, where CO₂ is stored underground for the sole purpose of climate mitigation. Today, only two commercial-scale projects involve dedicated underground storage of CO₂ in the USA: the Archer Daniels Midland facility in Illinois and the Red Trail Energy project in North Dakota, both ethanol facilities with CCS.

Europe

In the European Union, CO₂ storage and transport infrastructure are addressed across several pieces of legislation. The CCS Directive provides the regulatory framework for geological CO₂ storage, applying to any commercial storage facility above 100 KtCO₂/year. It sets out the permitting process, as well as the liability mechanism in the event of a leak and provisions for the entire lifetime of the storage site. When transposing the directive to national law, several member states, such as Austria, Germany, Ireland and Lithuania have prohibited geological CO₂ storage, though Austria and Germany are in the process of reversing this decision. Additionally, the Environmental Liability Directive sets out obligations to prevent and remedy environmental damage associated with CO₂ storage sites, whereas the Emission Trading System Directive sets out MRV and accounting rules.

Given the relatively small size of most European countries, CO₂ infrastructure is inherently a transborder issue. For this reason, the Trans-European Energy Infrastructure Regulation (TEN-E Regulation), which sets out guidelines for cross-border energy infrastructure in the EU, also covers CO₂ pipelines and storage projects across EU countries. Under the TEN-E Regulation, trans-border projects that help the EU achieve its energy and climate goals can be recognised as Projects of Common Interest (PCIs). Since 2013, the European Commission has published a list of PCIs every two years.

Figure 2: A map of planned CO₂ infrastructure projects in the 6th list of PCI candidates for cross-border CO₂ networks (from Clean Air Task Force). Most of the projects were recognised in the final list published by the Commission in November 2023.

Upcoming legislation will bring further changes to the CO₂ infrastructure landscape. The Net Zero Industry Act, which is expected to be adopted in Q1 2024, would create an obligation for oil and gas producers to develop an EU-wide 50 MtCO₂/year injection capacity by 2030. The Industrial Carbon Management Communication has identified measures to increase support towards CO₂ infrastructure, including the need to address CO2 transport in a dedicated regulatory and policy framework. The Commission would also support the adoption of an Important Project of Common European Interest on CO₂ transport and storage infrastructure, provided that enough member states would join.

There are several funding sources for CO₂ infrastructure projects available at EU level, including the Connecting Europe Facility for Energy programme—which recently unlocked EUR 480 million for four CO₂ infrastructure projects, the Innovation Fund, the Recovery and Resilience Facility, and the Just Transition Mechanism.

National action remains crucial for scaling up CO₂ infrastructure projects. In Europe, a cluster of countries around the North Sea have taken the leadership in developing such infrastructure, with Norway and the United Kingdom having the largest planned storage capacity, as shown in Figure 3. Within the EU, Denmark and the Netherlands have the largest planned storage capacity so far.

Figure 3: This figure shows the planned maximum CO₂ injection capacity in Europe. It does not include full-chain CCS projects with exclusive storage capacities. It aims to include all known plans publicly announced by 18.01.2024 at any stage of development. It displays the planned operational capacity within a given year by 31 December of that year.The increases are cumulative, with any new project adding capacity to existing ones. (own calculations based on data from CATF, IOGP, ZEP¹, ZEP²)

United States of America

The Bipartisan Infrastructure Law (BIL) provides funding for both CO₂ sequestration and transport. USD 2.5 billion was included in the BIL for carbon storage validation and testing to fund new or expanded large-scale sequestration facilities. The Department of Energy has selected projects for funding through two application rounds; project development will happen through the Carbon Storage Assurance Facility Enterprise (CarbonSAFE) Initiative. For transport of captured CO₂, USD2.1 billion is available through funding in the BIL under the Carbon Dioxide Transportation Infrastructure Finance and Innovation Program (CIFA) programme. In August 2023, the DOE issued a notice of intent, signalling an upcoming funding opportunity announcement for the programme.

In the US, projects that sequester CO₂ in underground geological formations must obtain a Class VI permit from the EPA. Since 2010, the EPA has issued permits for only two projects: one in 2014 for a project in Illinois, and one in January 2024 for a project in Indiana. The EPA also issued draft permits for another project in California in December 2023 (See full list here). The EPA’s underground injection control regulations, of which Class VI is a part, are designed to safeguard drinking water supplies, rather than to holistically address all types of safety concerns.

The EPA can delegate its federal regulatory authority over Class VI wells to US states through a process called ‘primacy’. As of early 2024, North Dakota, Wyoming and Louisiana were granted primacy, with Class VI permits issued for one project in Wyoming and six projects in North Dakota. Although the lengthy federal permitting process creates a bottleneck for scaling CDR in the US today, the EPA is working on addressing this challenge by aiming to shorten the current approval timeline to two years. They have also released an application tracker for permits, so as to increase transparency around the steps, application status and relative timeframes of each part of the permit process.

Several states, including Wyoming, Montana, North Dakota have implemented carbon sequestration-specific legislation. While the EPA, or states through primacy, regulate CO₂ sequestration in Class VI wells, it is up to states to establish regulatory frameworks for key legal challenges. California’s recent bill, SB 905, will establish a framework that will address issues such as pore-space ownership, storage assessments, liability, permitting and unitisation.

Figure 4: This figure shows the opportunities for geologic carbon sequestration in various types of formations, including saline. It also shows existing CO2 pipelines in orange (source: GPI, 2023).

CO₂ transport in the US mainly relies on pipelines, with around 8,000 km already in operation, although nearly 106,000 km are estimated to be needed to meet national climate goals. Ideally, capturing CO₂ near the sequestration site minimises the need for pipeline transport, but doing so is not always possible.

The PHMSA regulates pipeline safety at the federal level, while CO₂ pipeline permitting is primarily under state jurisdiction. Local opposition to CO₂ pipelines has grown recently, especially after a 2020 accident in Satartia, Mississippi. Although such incidents have so far been very rare, the PHMSA plans to update CO₂ pipeline standards and regulations in response to concerns that the design and oversight regulations are not adequate for the potential network expansion. The PHMSA’s notice of proposed rulemaking is expected in June 2024. The lack of updated rules has caused some states to delay the development of pipeline projects.

Figure 5: One scenario for CO2 pipeline buildout in the United States, reaching around 105,000 kilometres in 2050. (Princeton Net Zero America, 2021.)