Klima-, Energi- og Forsyningsudvalget 2023-24
KEF Alm.del Bilag 426
Offentligt
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Denmark’s position paper on deploying a
European framework for CO
2
transport
infrastructure
Denmark’s main priorities for transport infrastructure for a single market of CO
2
Carbon Capture, Utilisation or Storage (CCUS) are important tools for meeting climate goals, both globally and
at the EU level. The European CCUS market is at an early stage, and it is important to support market
development at the EU level to ensure that Europe becomes a global frontrunner in CCUS. This requires
establishment of a framework for all necessary parts of the CCUS value chain.
Reaching net-zero emissions by 2050 and negative emission thereafter will require CCUS to deliver substantial
reductions and removals well before 2040. This will require a massive scale up of all parts of the CCUS value
chain – capture, transport and storage or utilisation. In this context, timely establishment and regulation of
transport infrastructure will be critical for a successful CCUS implementation. With capture plants and storage
facilities already being prepared or built in many Member States and with the adoption of the Net Zero Industry
Act (NZIA), the first steps have been taken to develop a European market for storage. However, to prevent CO
2
transport infrastructure becoming a bottleneck in the development of the full CCUS value chain and a common
European CCUS market, it is crucial to establish a European framework for CO
2
transport infrastructure.
Sufficient European CO
2
-transport infrastructure is a key enabler for the successful large-scale deployment of
CCUS. It is necessary to develop the requisite cross-border infrastructure for transporting CO
2
from its sources
to suitable storage- or use sites. Whereas multiple modes of CO
2
transport - in particular shipping and CO
2
terminals - will likely play an important role in maturing the CO
2
market, a coherent transboundary pipeline will
most likely over time bring down transportation costs, where large volumes of CO
2
for storage or utilisation will
be transported.
A regulatory package for CO
2
transport infrastructure should:
Support a market-driven development and rollout of CCUS.
Establish a framework for regulation of cross border transportation.
Take caution when regulating an emerging market and keep a flexible approach during early
stages to prevent ill-suited regulation of frontrunners.
Provide access to financial de-risking to enable backbone infrastructure.
Establish a platform for coordination and knowledge-sharing among market actors to help the
development of the infrastructure.
Time is of the essence:
Denmark urges the Commission to launch its CO
2
-transport package announced in the Industrial
Carbon Management Strategy as soon as possible and no later than 2025.
A framework for CO
2
transport infrastructure is a necessity for a single European
market for CCUS
With the agreement on the Net Zero Industry Act (NZIA), the target has been set for the EU to have the injection
capacity to annually store 50 million tonnes of CO
2
by 2030. While this is an important step in kickstarting a
European CCUS market, it is equally important to establish a framework for transport infrastructure as a key
enabler for successful market development. Although the target set in the NZIA ensures the availability of storage
capacity by 2030, it is crucial that a transportation framework follows suit in a timely manner in order to avoid
stranded assets.
 KEF, Alm.del - 2023-24 - Bilag 426: Non-papirer fra regeringen inden for klima og energi ifm. tidlig EU interessevaretagelse, fra klima-, energi- og forsyningsministeren
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In the Industrial Carbon Management Strategy, the European Commission has announced a forthcoming CO
2
transport regulatory package that will address many key factors, such as market structure, cross-border
integration, technical harmonisation, etc. While this is a positive and important step, it is imperative that regulation
is in place at an early stage. If the regulation is presented too late, it risks hindering the emerging market and
ongoing front-runner projects. Additionally, a lack of clarity in the regulatory framework at the EU level could lead
to an unclear framework for investments in transport infrastructure at the national level.
Therefore, Denmark
urges the Commission to present its CO
2
transport regulatory package as soon as possible and no later
than 2025.
To enable a widespread large-scale implementation of CCUS in Europe, it is necessary to develop a cross-border
CO
2
transport network comprising pipelines, ships, and vehicles for transporting CO
2
from its sources to suitable
storage sites. This framework should establish the right conditions for the market to develop a cost-effective CO
2
transportation network. To avoid hampering an emerging market, all relevant means of transport should be
included, depending on each business case.
Generally, it is important to exercise caution and not
overregulate an emerging CCUS market too early on,
as this may negatively impact development and ongoing
front-runner projects. Moreover, it is not necessary to regulate the transport infrastructure to the same extent as
electricity infrastructure, since CO
2
does not play a role in the energy system when it comes to for example,
security of supply.
Furthermore, sector-specific contributions to CCUS should be avoided, as the development of CCUS should be
driven by all relevant market actors. Therefore, CO
2
transport regulation should only set the necessary key
enablers to support the development of the CCUS market, such as cross-border coordination, technical
harmonisation of CO
2
standards, and incentives for investments. However, it will be important to strike the right
balance, where hesitation to not overregulate does not lead to no regulation. It is important to send a clear signal
to the market about regulation and direction of the framework for CO
2
cross-border transportation.
The regulatory framework should primarily address transportation via pipelines. CO
2
transport by ship, by truck
or by rail does not come with the same inherent market failures as pipeline infrastructure. This is due to the unique
nature of pipeline transport (large CAPEX investments, low OPEX costs, low flexibility, long lead times, and a
monopoly-like situation), which does not characterise the other modes of CO
2
transport to the same extent.
Another aspect that the regulation needs to focus on is safety. Safe transport of CO
2
is crucial. Hence, safety
requirements should be ambitious and ensure that no pipelines are allowed to be built in the EU where there is a
risk of significant leaks.
Establish an EU-approach for financial de-risking
Current financial EU instruments such as the Connecting Europe Facility (CEF) and the Innovation Fund provide
funding at a project specific level. However, one of the main hurdles of developing a cross-border CO
2
infrastructure is de-risking. It will therefore be necessary to look into
how the EU could best contribute to
financial de-risking of operators of CO
2
transport in the EU.
In order to mitigate the financial risks in the first
stages of infrastructure development and ensure a long-term cost efficiency of transport infrastructure, it is
necessary to consider the financial security for operators and investors in transport infrastructure and secure that
owners of the infrastructure ensure that it is dimensioned for future needs.
Cross-border infrastructure coordination
The current development of the CCUS market is planned and constructed, often with a project-based approach
depending on Member State or EU subsidy funds. These networks include various means of transportation, such
as pipelines, ships, and vehicles. In the long term, these networks can be expanded and interconnected across
Europe, connecting CO
2
sources with distant storage sites across borders. In order to ensure the best possible
conditions for the market actors to invest in large cross-border infrastructure projects, there will be a need to
increase coordination among relevant market actors.
Coordinating CO
2
pipeline infrastructure can also provide security to industries with hard-to-abate emissions
across Europe, ensuring access to CCUS infrastructure and preventing ad hoc strategies that could slow down
the progress of a trans-European transport network. The industrial emission sources across the EU are fairly well
known at this point, which could serve as a starting point for coordinating a pipeline infrastructure that connects
them to already identified storage sites. Such coordination could also provide clarity for producers of methanol
 KEF, Alm.del - 2023-24 - Bilag 426: Non-papirer fra regeringen inden for klima og energi ifm. tidlig EU interessevaretagelse, fra klima-, energi- og forsyningsministeren
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and e-fuels on where to place their facilities to achieve the best access to a CO
2
transport network. This can be
supported at European level by coordinating forums where the industry can exchange views and possibilities.
onto provide clarity on where pipeline routes are needed, coordination at the EU level, including between market
actors, should be initiated as soon as possible.
Addressing CO
2
quality standards
In the long term, when a pipeline infrastructure is sufficiently developed to constitute a backbone of a trans-
European transport network, it will need to handle CO
2
streams from different sources. CO
2
for storage and
utilisation should be able to be transported in the same pipeline infrastructure. Therefore,
it should be possible
to mix CO
2
of fossil origin and CO
2
of biogenic origin in the same transport infrastructure
in order to ensure
harmonisation and avoid market fragmentation. To this end, it is necessary to establish a certification scheme,
where CCU actors will be able to document that the origin and source of the CO
2
they receive is of biogenic origin,
in line with relevant EU legislation
1
. Experiences with the European Guarantees of Origin and Certification
Schemes for green gases could be utilised in the design process. Furthermore, it is necessary to develop a
common minimum CO
2
stream quality standard in order to ensure that transportation through an interconnected
pipeline infrastructure can handle CO
2
streams from all relevant sources without causing market fragmentation.
Finally, this also raises the questions of setting common CO
2
purity standards for transport in a trans-European
pipeline infrastructure. In this regard,
CO
2
purity standards should be set at a level
that on the one hand, takes
into account that the requirements should not lead to disproportionate costs for purification at the capture sources,
while on the other hand not allowing for so many impurities that the pipelines themselves become
disproportionately expensive to build.
1
Commission Delegated Regulation (EU) 2023/1185 of 10 February 2023 supplementing Directive (EU) 2018/2001 of the European Parliament and of the Council by
establishing a minimum threshold for greenhouse gas emissions savings of recycled carbon fuels and by specifying a methodology for assessing greenhouse gas
emissions savings from renewable liquid and gaseous transport fuels of non-biological origin and from recycled carbon fuels.