CO₂ Infrastructure: The Missing Link to Climate Neutrality

The European Union has set itself the goal of becoming climate neutral by 2050, with an interim target of reducing net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. Germany has enshrined similar targets in its Climate Protection Act, which aims for greenhouse gas neutrality by 2045 and a 65% reduction in emissions by 2030 compared to 1990 levels.

Among the most important technologies for achieving these ambitious goals are renewable electricity sources such as wind and solar, which are becoming increasingly competitive with fossil fuels. In addition, battery technologies and hydrogen as a climate-friendly energy carrier are of great importance. However, despite all efforts to reduce greenhouse gas emissions, there are certain industries where carbon dioxide (CO₂) emissions cannot be avoided, even when using the most advanced technologies and processes.

The best-known examples of this are the cement and lime industries and waste incineration, where fossil or geological CO₂ emissions are mainly caused by the underlying physical or chemical process and cannot be avoided. Consequently, these unavoidable emissions must be effectively captured, transported and either stored or utilised in order to achieve climate targets. Although various methods, including pre-combustion, post-combustion and oxy-fuel combustion techniques for CO_₂ capture, are already state of the art, there are still no large-scale CO₂ transport systems in Europe. Pipelines are the most common and cost-effective option for transporting large quantities of CO2 or other mediums over long distances. Studies such as those by the German Cement Association (VDZ) (VDZ, 2024) show that the development of a CO₂ infrastructure is essential for the cement, lime and waste incineration industries. According to their study, annual CO₂ emissions from these three sectors alone are estimated at around 58-65 million tonnes per annum (Mtpa) in Germany. The VDZ therefore emphasises that without a transport infrastructure, climate neutrality cannot be achieved by 2045 and a CO₂pipeline network is necessary by 2035 at the latest in order to meet climate targets.

In order to support the initiative for a climate-neutral economy and thus contribute to strengthening the competitiveness of German industry, Open Grid Europe GmbH (OGE) is planning a CO_₂ pipeline infrastructure for Germany. As shown inFigure1 , OGE’s CO₂ network is based on demand-oriented planning that connects emission-intensive regions and enables cross-border transport. However, the development of a CO₂ transport infrastructure also presents various challenges, ranging from technical and economic implementation to political support and public acceptance, which are explained in more detail in this article.

Who is OGE?

OGE is one of the leading gas transmission system operators (TSOs) in Europe and can look back on over 90 years of company history and expertise. Today, OGE operates a natural gas pipeline network of around 12,000 km in length, is part of the German H₂core network and commissioned its first hydrogen transport pipelines at the end of 2025.

As a company, OGE has always accompanied the transformation of energy supply and actively driven forward the associated changes, starting with the expansion and establishment of city gas networks, through the switch to natural gas, to the current step into the world of hydrogen. OGE is a reliable partner for business, politics and the public, as we were able to prove once again in 2022 when the WAL (Wilhelmshaven connection pipeline) was built in a record-setting nine months to connect the first German LNG terminal.

Another chapter in this story is now being written by enabling the future transport of CO₂. OGE is currently working with various international partners and is working on the implementation of the first CO₂ infrastructures.

Key challenges in project implementation

OGE is currently working on various projects to establish the first CO2 pipeline infrastructure in Germany. The emissions data base is our market survey which confirms, that North Rhine-Westphalia (NRW) alone is responsible for around 40% of hard-to-avoid emissions in Germany. Almost all projects are being carried out in a European context and within the framework of European cooperation. These projects are:

• Cluster Elbe: Together with Holcim Germany, OGE intends to construct and commission the first German CO₂ pipeline infrastructure to enable climate-neutral cement production at the Lägerdorf site, north of Hamburg.
• Delta Rhine Corridor (DRC): OGE is working with Gasunie and partners BASF and Shell to develop a large-scale pipeline solution from the key region of North Rhine-Westphalia to storage options in the Netherlands.
• Belgian North Sea CO₂ Corridor: Via Fluxys in Belgium, an evacuation route to Norwegian storage facilities is being developed using Equinor’s CO₂ Highway Europe. Initially, the target on the German side is the key region of North Rhine-Westphalia.
• WHV CO₂ Corridor (WHVCC): The aim is to connect German and, in the future, European emitters with export projects such as the CO2T pipeline project from Gassco to Norway, the TES-H2 CO₂ export terminal and others on the German North Sea coast around Wilhelmshaven.
• DK CO₂ Corridor (DKCC): The aim is to establish a cross-border transport link to the Danish border to give German and European emitters access to Danish storage options (onshore and offshore).
• German Carbon Transport Grid (GCTG): OGE draft of a German CO₂ transport system in Europe, for Europe and part of the upcoming PMI list

As a company, we are therefore involved in many promising projects and in constant dialogue with European partners. Our aim is to initially think about the challenges from a European perspective, as Germany, with its geographical location and nine borders, can and should play a decisive role in solving European challenges. With regard to the time required for the implementation and deployment of CO₂ infrastructures, we believe that the following aspects have emerged as the greatest challenges for development in Europe and Germany:

• Coordination: The EU and, for in OGE’s case, Germany should play a stronger role in coordination. We see many interested companies, but also many options and, all in all, a high degree of uncertainty. The markets will coordinate themselves, but not at the necessary speed.
• Risk hedging: The development of value chains requires massive investments, especially on the large scale that is necessary. A large project such as the Delta Rhine Corridor or the North Sea CO₂ Corridor requires investments in the mid double-digit billion-euro range and the coordination of investment decisions. Storage, transport and capture units must go into operation at almost the same time and rely on each other. This requires long-term contractual relationships in the CO₂ value chain, while emitters tend to maintain short-term agreements with their customers. In addition, there are default risks or risks relating to changes in the political framework. All in all, risk hedging is more important than subsidies from the perspective of an infrastructure operator.
• Double burden: A solution must be found for the potential double punishment of issuers, which represents a high risk for them. In practice, it may happen that an issuer has concluded all contracts and the entire chain is functioning. However, if part of the chain (pipeline, ship terminal or storage facility) fails due to a force majeure event, the issuer still has contractual obligations in the chain and must additionally purchase CO₂ certificates, thus creating a massive imbalance.
• Bankability: All these points ultimately contribute to one aspect. The CO₂ market must become bankable, and it can only do so if certain parameters are reliable. The markets that are already developing, e.g. Norway and the UK, have so far managed to do this, particularly because the governments here are ready to coordinate and provide security, which makes the market predictable. Due to the lack of an existing commodity and the fact that the framework has not been finalised, the uncertainties are very great and difficult to manage quickly.

We as OGE will tackle these challenges together with our partners, future users and policymakers will be crucial in the next phase in order to realise large-scale CO2 transport infrastructures in good time and thus fully realise their benefits for achieving climate targets in a timely manner.

References

Open Grid Europe GmbH. (01. 07 2024). Retrieved from https://oge.net/de/co2/co2-netz

VDZ. (2024). Requirements for a CO2 infrastructure in Germany – prerequisites for climate neutrality in the cement, lime and waste incineration sectors. Düsseldorf: VDZ.