From hands-off to hands-on: The need for a European regulatory framework for CO2 transport infrastructure

The European Commission has stated that to achieve the goal of climate neutrality by 2050, within the same timeframe, up to 300 million tonnes of CO2 will need to be captured, transported, and permanently stored on an annual basis. Transporting and storing CO2 in the volumes envisioned will require an extensive network of cross-border pipelines, shipping terminals and geological storage sites. To achieve this, Bellona strongly believes that that the EU must quickly agree on a new regulatory framework which obliges cross-border planning and coordination, prevents market failures and supports public/private investment through targeted risk management solutions. 

The ongoing EU legislative initiative on CO2 transportation infrastructure and markets, due for adoption in late 2026, represents an opportunity to address these issues, but only if the framework’s design considers the current market dynamics of the nascent industry.

Done right, the initiative has the potential to set structured and predictable approaches to ownership structures, third-party access procedures, fair and transparent tariff mechanisms and clear expectations for regulatory oversight by competent authorities. European coordination, together with a harmonised approach to managing investment risk can help to minimise the costs to European industry and in turn the societal cost associated with CO2 abatement.     

European Coordination of CO2 transport and storage infrastructure is vital

Despite a clear identification of the European Commission of the need for cross-border CO2 transport, there is currently no EU-level coordination or planning of CO2 pipeline or storage infrastructure. Despite endorsing 14 vital Projects of Common Interest (PCIs) in 2025, Europe risks a fragmented mess of duplicate pipelines, unused capacity, and stranded industrial clusters. In addition, uncoordinated build-out invites inefficiency. Multiple planned pipelines chasing the same emitters inflate costs, strain spatial planning, and undermine investor confidence. Without a master plan syncing capture, transport, and storage timelines, CCS will stall. 

Regulation is not only about tariffs; it can also be a planning tool. Anchoring this planning in a regulatory regime that rewards anticipatory, least cost buildout can avoid a patchwork of overspecified private lines that later need expensive retrofitting or consolidation.

Other major European pipeline infrastructure networks have European Networks of Transmission System Operators (TSOs), ENSTO-G (gas), ENTSO-E (electricity) and ENNOH (hydrogen). These bodies ensure coherent, secure infrastructure by harmonising national plans, assessing scenarios, and evaluating cross-border projects against transparent criteria. CO₂ networks warrant a parallel structure. Operating independently under ACER supervision and Commission approval, an ‘ENTSO-C’ or ‘ENNOC’ would align national roadmaps, develop EU-wide corridor plans incorporating multimodal transport, and enforce conformity checks on major expansions to prevent duplication. 

Enforcement and oversight is needed to prevent market failures

Initially, EU Member States with an interest in CCS took a laissez-faire approach towards the ownership of CO2 transport and storage infrastructure, allowing market players to take the lead and make commercial agreements in a largely unregulated environment. Whereas giving the market room to take initiative and develop innovative business models is highly desirable, this is not without risk.

In 2022, in the Port of Rotterdam, the prospective emergence of a fully vertically integrated CO2 transport and storage project, offering bundled transport and storage services, created considerable distrust amongst potential users who had to negotiate directly with their competitors, most of whom considered the project initiators to have an unfair market position. A subsequent independent economic evaluation commission by the Dutch government, confirmed that the project initiators indeed held an effective national monopoly on the provision of CO2 transport and storage services in the region, and recommended stronger regulatory oversight on market developments and transport and storage tariffs in the Netherlands. 

Intentional or not, the example from the Netherlands highlights that structural ownership unbundling of CO₂ pipelines from capture and storage, should be treated as the default for Europe’s emerging CO₂ networks, but applied through a differentiated, pragmatic framework that reflects the diversity of transport configurations.

Large pipelines through industrial clusters or built with significant marketable capacity clearly warrant strict ownership separation to prevent vertically integrated players from locking out rivals and distorting tariffs. By contrast, point-to-point links from one capture site to one storage facility does not justify the same regulatory intervention. 

Such examples of market failures haven’t gone unnoticed, with other Member States currently taking a more hands-on regulatory approach. Most recently Denmark and the Flemish region of Belgium have passed legislation on ownership and tariffs around CO2 transport pipelines, with France in an advanced stage of preparation. But these isolated, disparate approaches to regulation presents another risk, that a patchwork of various regulatory frameworks constrains the emergence of an EU market. The new legislative initiative must act to ensure a harmonised approach, while respecting existing Member States legislation.   

Managing risk and enabling private investment          

The majority of CO2 infrastructure is currently being financed through tailormade commercial structures, blending carbon contracts for difference, grants and state support on a project-by-project basis. Whereas this approach may be enough for the first wave of smaller projects, it will not scale to the hundreds of megatonnes per year of capacity that the European Commission envisages. 

Pure commercial investment is considered challenging, as the risk profile of CO2 infrastructure is dominated by policy and demand uncertainty rather than conventional construction risk.

Emitters’ capture investments depend on future ETS prices, CBAM design, and product-market demand, all of which sit largely outside the operator’s control. Investors require predictable tariff logic and a low-risk pathway to returns. 

Economic regulation of CO2 transport infrastructure offers a powerful lever to unlock private investment without the use of endless subsidies. The UK’s regulated asset-base (RAB) approach has opened the door to low-cost institutional capital, hungry for long duration, inflation linked infrastructure exposure. The result is not socialisation of all risk, but a risk sharing compact: investors accept lower upside in exchange for credible protection from catastrophic downside. 

By establishing clear, predictable rules – such as cost-reflective tariffs, third-party access procedures, and public/private risk-sharing mechanisms, the new EU legislative initiative can set the foundations for a sufficient, timely and efficient CO2 market.  

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1 European Network of Transmission System Operators for Gas
2 European Network of Transmission System Operators for Electricity
3 European Network of Network Operators for Hydrogen

4 Mulder, M. 2024. University of Groningen. marktordening-ccs-mulder-cenber-policy-paper-14.pdf (in Dutch)