Achieving a European market for CO2 transport by ship
Disclaimer
The report aims to provide an indicative description of the future European market for CO2 transport
by ship and recommendations to ensure the full development of this market. This report does not
preclude or make assumptions on any future commercial development or decision.
Recognition
We would like to express our gratitude to those who contributed to the report, including Imran Abdul-
Majid (Northern Lights), Chris Armes (Storegga), Trevor Crowe (Carbon Collectors), Jeff Davison
(Storegga), Baris Dolek (Northern Lights), Martin Edwards (Harbour Energy), Kathryn Emmett (Slaughter
and May), Yunzhe He (SIGTTO), Jasper Heikens (Ecolog), Phil Hinton (Shell), Tomoki Inoue (Knutsen NYK),
Anton Malakhov (Slaughter and May), Clément Merat (Equinor), Stavros Niotis (Prime Marine), Gabriel
Otaru (Neptune Energy), Ian Phillips (Energy Transition Advisory), Alistair Tucker (Shell), Luke Warren
(bp), Matt Wilson (Navigator Terminals), and Aaron Wu (Slaughter and May).
We would particularly like to thank the three co-chairs Ian Phillips (Energy Transition Advisory), Haije
Stigter (Carbon Collectors), and Martin York (Storegga) for their commitment to the work.
Executive summary
Regulatory and policy
• Policymakers across Europe should support the development of CO2 transport by ship as a
credible and necessary component of carbon capture and storage and industrial
decarbonisation.
• The future European market of CO2 transport by ship should develop on a commercial basis.
Regulated tariffs are not recommended.
• The cross-border transport of CO2 requires the recognition of storage by other countries and the
proof that the captured CO2 is safely stored. The EU and the UK should enter into an agreement
to ensure that emitters located either in the EU/EEA or the UK do not have to surrender ETS
allowances when storing CO2 in the other ETS system. Such an agreement is key to support cross-
border CO2 transport in Europe.
• To support the cross-border transport of CO2, European countries that are parties to the London
Protocol should deposit a notice to provisionally apply the Article 6 amendment to the London
Protocol with the International Maritime Organization and sign bilateral agreements where
needed.
• National and EU public authorities should ensure that subsidy mechanisms do not prejudice
against those emitters reliant on shipping to access CO2 stores.
• Regulatory frameworks should include compensation mechanisms for the losses of ETS credits
linked to the CO2 buffer storage volumes required to stabilise transport and storage systems.
1
• National authorities should incentivise investments to pre-invest in the expansion of key CO2
shipping infrastructure components.
• The revision of the Monitoring and Reporting Regulation should address regulatory gaps
regarding CO2 transport by ship.
Funding
• The development of sufficient geological storage capacity should be supported via adequate
incentives.
• Public authorities should create mechanisms to make investments in CO2 shipping at least as
attractive as investments in conventional shipping businesses.
• Legislative frameworks should recognise CO2 shipping as an enabler of bioenergy with carbon
capture and storage (BECCS) and Direct Air Capture with Carbon Storage (DACCS) to allow
funding through the voluntary market.
• Early projects should have sufficient funding support to demonstrate that CO2 shipping is a viable
alternative to pipeline transportation.
• Port authorities should incentivise port/harbour fees for CO2 shipping and/or vessel
prioritisation protocols for CO2 shipping.
Standardisation
• Recognising the different shipping conditions of CO2 specifications for shipping, liquefaction, and
onshore storage is recommended to ensure compatibility and consistency between CCS projects
. A European CO2 transport system covering all modalities (pipelines, road, rail, inland waterway,
and ship) requires universal rules for allowable/acceptable CO2 impurities. This transport grid
should have the possibility to distinguish between transport modes. Shipping companies that
take CO2 out of a pipeline system will need to consider end-of-pipeline solutions to get the CO2
to their required conditions.
• For the proposed transport conditions (low pressure, medium pressure, and high pressure, see
definitions below) the Society of International Gas Tanker and Terminal Operators (SIGTTO) is
encouraged to standardise ship-shore interface to enable compatibility, destination optionality,
and increase market competition.
• International standard methodologies for CO2 metering and calibration for mass-balance
quantification should be developed.
Research and development
• Public authorities should support research into the functioning of a multimodal CO2
transportation system, where CO2 is transported via trucks, train, barges, and ships.
• More research work should be undertaken on CO2 specifications for ship transport to gather
additional data and map the CO2 stream compositions from all possible emitters.
Operations
• Shipping companies should conduct structured classroom training to teach the specific hazards
of CO2 operations to ship crews.
2
• Competent authorities should develop effective safety and environmental footprint
performance in early phases of CO2 shipping as a pre-condition to vessel owner License to
Operate.
Main findings
• A 20,000-tonne cargo liquified CO2 ship with a one-week round trip time can transport
approximately one million tonnes of CO2 per annum, assuming there are no logistical nor
weather delays.
• As of today, in Europe, one project with a contracted CO2 shipping capacity of 2 million tonnes
per annum has taken a Final Investment Decision. Based on a review of projects currently under
development, it is estimated that up to 39.5 million tonnes of CO2 could be transported per year
by 2030. The corresponding fleet of dedicated CO2 carriers is evaluated between 6 (3 ordered
and 3 anticipated, all related to Northern Lights) and 40 vessels. An educated estimate for the
number of vessels required by 2030 is in the range 10 to 20 vessels. However, should every
project come to fruition in the short term, which is unlikely, the total number of vessels could
exceed 50. This estimation is purely indicative and aims to provide a view of the potential future
market. The capacity of future European storage sites compatible with ship transport could
exceed 50 million tonnes per year by 2030.
• Vessels are expected to be contracted for specific point-to-point CO2 transport and will not be
available for spot-market transport by 2030.
Definitions
These are the pressure and temperature ranges of the three conditions considered for CO2 transport.
Density ranges have been rounded1.
Low pressure
Medium pressure
High pressure
Temperature (°C)
-55 to -40
-30 to -20
0 - 15
Pressure (barg)
5 – 10
15 – 20
35 - 50
Density (kg/m3)
1170 - 1120
1080 - 1030
930 - 820
1 Orchard et al., The status and challenges of CO2 shipping infrastructures, 2021, Greenhouse Gas Control
Technologies Conference 15, MegaWatSof
t, Carbon dioxide properties.
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1) Introduction
Year after year the consequences of climate change are becoming more and more perceptible for
citizens across the world. Urgent and effective climate action is required by policymakers in Europe and
across the world. The deployment of carbon capture and storage (CCS) at scale is indispensable to stay
in line with global climate ambitions as repeatedly stated by the Intergovernmental Panel on Climate
Change (IPCC) and the International Energy Agency (IEA). CCS development requires the effective
deployment of the capture, transport, and storage parts of the value chain. Ship transport is essential
to guarantee full-scale CO2 transport across Europe. Among other reasons ship transport is crucial for
smaller volumes of CO2, transportation over longer distances and CO2 from isolated sites as well as early
and smaller projects. CO2 transport by ship must therefore be an integral part of CCS policies developed
across Europe.
CCS is currently experiencing a positive momentum across Europe. Recent positive developments
include the awarding of 21 storage licenses by the North Sea Transition Authority (NSTA) in the UK and
a wide-ranging political agreement on CCS in Denmark. Dedicated CCS strategies for France, Germany,
and the EU are expected between 2023 and 2024. Crucial project announcements, including final
investment decisions, are expected in the coming months. This positive policy and commercial
momentum must be preserved and strengthened to ensure the success of CCS projects across Europe.
This report aims to provide a description of the future European market for CO2 transport by ship,
identify the main barriers and enablers, and provide clear policy and technical recommendations to
policymakers. These recommendations seek to guarantee the emergence of a European market for CO2
transport by ship that is critical for Europe’s industrial decarbonisation.
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2) Mapping the European market for CO2 transport by ship in 2030
1. Captured CO2 that will be transported by ship
To identify the likely requirement for CO2 shipping by 2030, we have examined those projects most likely
to reach final investment decision (FID) in the period 2023-2028. The projects listed below have the
potential to go ahead in this timeframe as they are either part of the 1st Union list of Projects of Common
Interest (PCIs) and Projects of Mutual Interest (PMIs)2 under the Trans-European Networks for Energy
(TEN-E) policy or the UK CCS Cluster Sequencing process. The 14 projects selected in November 2023
under the 1st Union list are highlighted and used for the total estimated volumes. CCS is experiencing a
strong momentum across Europe and new projects are announced regularly. As an example, the Porthos
project in the Netherlands took a final investment decision in October 20233. The description below is
indicative and expected to evolve as new projects are announced.
Emitter / Project
Timetable
Shipping volumes by 2030
EU TEN-E PCI/PMI Projects (based on the 1st list)
CO2TransPorts
Phase 1 (2023) – Rotterdam
No shipping likely unless a
Rotterdam / Antwerp / North
pipeline network focus – no
Rotterdam-Antwerp pipeline
Sea Port link up to use
shipping
does not materialise. If no
Netherlands storage via
Phase 2 – Antwerp/ North Sea
pipeline is built, Antwerp
pipeline to P18
Port pipeline network focus –
shipping volumes will be ~10
no shipping
million tonnes per annum
Porthos (final investment
Phase 3 (2030) – pipeline
(mtpa)
decision taken)
Antwerp/Rotterdam
Northern Lights
Phase 1 (1.5 mtpa capacity):
5 mtpa
Operational in 2024
Customers: (i) Heidelberg
Materials (previously Norcem)
cement factory in Brevik (Oslo
Fjord), (ii) Waste-to-energy
plant Hafslund Oslo (Oslo
Fjord), (iii) Ørsted (Denmark)
Phase 2: (5 mtpa, including
phase 1): Expansion of phase 1
facilities with additional wells,
ships and onshore tanks
Aramis
Second Rotterdam-centered
Shipping unlikely before 2030
project using separate offshore
pipeline
2 Annex on the first Union list of Projects of Common and Mutual Interest, DG ENER, European Commission, 28
November 2023.
3 First CO2 storage project in the Netherlands is launched, Porthos, 18 October 2023.
5
Emitter / Project
Timetable
Shipping volumes by 2030
Nautilus
Link clusters in Le Havre,
2.5 mtpa (2027-2030)
Dunkirk, and Duisburg, to a new
storage site in the Norwegian
North Sea
EU2NSEA
Capture facilities on industrial
Shipping unlikely before 2030
plants in 8 EU member states,
including Belgium, Germany,
and the Netherlands, plus the
necessary pipeline
infrastructure to transport CO2
to the North Sea
Norne
Emitters in Denmark, Sweden,
18.7 mtpa by 2030
and Belgium – build out storage
network using CO2
pipeline infrastructure that
enables LCO2 ships to transport
third-party CO2
WH2V
Wilhelmshaven, Shipping hub
10 mtpa
to export German CO2
Noordkaap
Project led by CapeOmega
20 mtpa
Stage 1 – shipping from the
Netherlands to Norway
Stage 2 – Additions in the
Netherlands, Belgium,
Germany, Sweden
Bifrost
Danish capture project with
None
pipeline to offshore Danish
chalk reservoirs
Injection capacity of 3 mtpa
Work examines a fleet of low-
temperature ships and a
No shipping likely by 2030,
reception port
expected initial focus on
No timetable published
onshore capture
ECO2CEE
CO2 shipping terminal in
2.7 mtpa (2025-2030)
Gdansk to ship Polish /
8.7 mtpa (2030-2035)
Lithuanian emissions
CCS Baltic Consortium
Baltic States CCS study
1 mtpa by 2030
~20 mtpa over 20 years4
Pycasso
Onshore south-west France /
None
north-west Spain project
Callisto
Italian CO2 storage based on
3.6 mtpa (2027-2032)
the Ravenna Hub
Augusta C2,
Italian / Greek project focused
1 mtpa by 2025
4 CCS Baltic, Project Benefits, as of 8 December 2023.
6
Emitter / Project
Timetable
Shipping volumes by 2030
Prinos CO2 storage
on the Prinos field store
Potential UK Clusters
Net Zero Teesside
Pipeline only project
None
Hynet
Pipeline only project. Shipping
None
discussed for a future phase
Scottish Cluster
Planned port infrastructure to
1-2 mtpa
receive shipped CO2
Viking CCS
Planned port infrastructure to
1-3 mtpa
receive shipped CO2
Zero Carbon Humber
Pipeline only project
None
An analysis of the above information suggests a range of likely shipped volumes:
Emitter / Project
Timetable
Shipping volumes by 2030
Projects seen as certain
Northern Lights (approved for
Phase 1 (1.5 mtpa capacity)
5 mtpa
PCI/PMI status)
3 ships under construction5 + 3
Operationally ready in 2024
ships anticipated
Customers: Heidelberg
Materials cement factory in
Brevik (Oslo Fjord), waste-to-
energy plant Hafslund Oslo
(Oslo Fjord), and Ørsted
(Denmark)
Phase 2: (5 mtpa, including
phase 1): expansion of phase 1
facilities with additional wells,
ships, and onshore tanks
Projects seen as likely
CCS Baltic Consortium
Cross-border CO2 transport via
1 mtpa
(approved for PCI/PMI status)
rail between Latvia and
Lithuania with a multi-modal
LCO2 terminal in Klaipeda
Nautilus (approved for PCI/PMI
Link clusters in Le Havre,
2.5 mtpa
status)
Dunkirk, and Duisburg, to a new
storage site in the Norwegian
5 Northern Lights awards third ship building contract, Northern Lights, 1 September 2023.
7
Emitter / Project
Timetable
Shipping volumes by 2030
North Sea
Norne (approved for PCI/PMI
Emitters from Denmark,
18.7 mtpa
status)
Sweden, Belgium, and the UK
Storage network using a
pipeline infrastructure that
enables LCO2 ships to transport
third-party CO2
WH2V (not approved for
Wilhelmshaven, Germany
10 mtpa
PCI/PMI status)
Shipping hub to export CO2
from Germany
Noordkaap (not approved for
CapeOmega-led project, aims
20 mtpa
PCI/PMI status)
for direct injection
Stage 1: shipping from the
Netherlands to Norway
Stage 2: added capacity in the
Netherlands, Belgium,
Germany, and Sweden
ECO2CEE (approved for
CO2 shipping terminal in
2.7 mtpa
PCI/PMI status)
Gdansk (Poland) to ship
emissions from
Poland/Lithuania
Callisto (approved for PCI/PMI
Italian CO2 storage based on
3.6 mtpa
status)
the Ravenna Hub
Prinos (approved for PCI/PMI
Italian/Greek project focused
1 mtpa
status)
on the Prinos storage site
Potential UK Clusters
Scottish Cluster
Planned port infrastructure to
1-2 mtpa
receive shipped CO2
NB: This is an import-only
facility that is assumed to
proceed once emitters are
contracted.
Viking CCS
Planned port infrastructure to
1-3 mtpa
receive shipped CO2
NB: This is an import-only
facility that is assumed to
proceed once emitters are
contracted.
Total volumes
All above projects
5 – 39.5 mtpa
To put the above figures into context, a single 20,000 m3 ship could transport approximately 1 million
tonnes per annum based on typical shipping distances within the EU. A more detailed analysis is provided
under subsection 2.3.
8
This would suggest a requirement for 6 to 40 vessels by 2030, with uncertainty associated with voyage
length, duration, port capacity (dredged depth), and project completion. The lower range is based on
the three vessels under construction for the Northern Lights project and the three additional vessels
expected for this project. It is worth noting that projects were identified under the Union projects list
and the UK Cluster Sequencing Process and that some may not materialise by 2030. The total size of the
fleet depends on the cumulated success of several CO2 transport by ship projects. In terms of pure
probability, the upper range figure of 40 vessels is therefore less likely than the lower range figure of 6
vessels. An educated estimate for the number of vessels required by 2030 is in the range 10-20 vessels.
These vessels are likely to be built on a project-by-project basis with vessels dedicated to transporting
CO2 from specific emitters to a specific storage location. It is possible that some vessels will be contracted
to provide a ‘milk run’ service, collecting CO2 from multiple collection points before heading to a
destination port. However, the emergence of a spot market for CO2 transport is not expected in this
timeframe.
Container-size tanks are also envisaged for rail, road, and inland barge transport. This type of transport
could be useful for small emitters, capture projects in their initial phase, and for the mitigation of low
river levels and unforeseen events.
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2. Storage sites for CO2 transport by ship
A total of 26 CO2 storage projects at varying stage of maturity have been identified. Many of the
projects are still in the early stages of project concept selection and, as a result, are rather vague about
CO2 transportation plans, annual injection capacities, and overall storage capacities. Of these:
• 6 projects totalling a maximum of 15 mtpa injection are explicitly planning to use shipping to
transport CO2 to a reception port by 2030 – likely then transporting by pipeline to the offshore
location.
• 1 project with a capacity of a further 3 mtpa injection is explicitly planning to use shipping to
transport CO2 to Project Coda in Iceland. This project is listed separately as it is a longer voyage
and there is additional storage technology uncertainty, which may delay the project (the
storage depends on CO2 mineralisation).
• 2 additional projects totalling 14 mtpa injection are explicitly planning to ship CO2 directly to
the offshore store for direct injection by 2030. Such schemes involve shipping at ~50barg –
significantly higher than the more ‘conventional’ shipping conditions (low pressure at 7bar/-
50˚C; medium pressure at 18bar/-30˚C).
• Of the UK projects, Acorn and Viking CCS have explicit plans for the shipping of CO2 by 2030 –
although all have deepwater ports near to their pipeline terminals and could take shipped CO2
in the future. Acorn could take 1-3 mtpa of shipped CO2 depending on contractual
arrangements. Viking CCS could take 1-3 mtpa of shipped CO2, subject to contractual
arrangements6789.
6
Transforming the Humber into a net zero SuperPlace, Viking CCS.
7 Viking CCS and Associated British Ports embark on major step towards a future CO2 shipping industry in the UK,
Associated British Ports, October 2022.
8 Viking CCS and Associated British Ports embark on major step towards a future CO2 shipping industry in the UK,
Harbour Energy, Viking CCS, and Associated British Ports, October 2022.
9 Immingham Green Energy Terminal, 2023.
10
Storage Site Name
Country
Name
Store type
Offloading port in plans
Injection capacity mtpa
Onshore northern Croatia
Croatia
Geothermal CCS Croatia
Depleted gas field
No – onshore
1.04
Onshore Denmark
Denmark
Norne
Not yet defined, port identified
20
Harald Field, Offshore Denmark
Denmark
Bifrost
Yes
0,5
Offshore Denmark
Denmark
Project Greensand
Depleted oil field
Yes
1.5
Stenille
Denmark
Stenlille
Aquifer
Not yet defined
Unknown
Pycasso (Onshore storage)
France
Lacq region
Possibly
Unknown
Prinos Field (offshore Greece)
Greece
Prinos CO2 Storage
Pipeline or ship
2
Carbfix mineralisation process
Iceland
Carbfix Project Coda
Ship
3
Callisto
Italy
Callisto Mediterranean CO2 Network
Depleted gas field
Yes
5.6
Offshore Netherlands
Netherlands
Noordkaap
Yes
1
P18 Gas Field, Netherlands
Netherlands
Porthos
Pipeline
2.5
Offshore Netherlands
Netherlands
CO2TransPorts
Depleted gas field
Pipeline / Direct Injection from ship
10
L10 Area, offshore Netherlands
Netherlands
Neptune Energy
Pipeline / Direct Injection from ship
4
Aramis store, offshore Netherlands
Netherlands
Aramis
Depleted gas field
Inland barge to pipeline
5
Offshore Norway
Norway
Luna
Pipeline / Direct Injection from ship
Unknown
Luna and Smeaheia
Norway
Equinor store linked to EU2NSEA project
Aquifer
Pipeline / Direct Injection from ship
Unknown
Offshore Norway
Norway
Havstjerne Storage Project and Errai10
Aquifer
Pipeline / Direct Injection from ship
7
Offshore Norway
Norway
Poseidon Storage Project
Aquifer
Pipeline / Direct Injection from ship
Unknown
Offshore Norway
Norway
Northern Lights
Aquifer
Yes
1.5
Acorn
UK
UK Scottish Cluster
Depleted gas plus aquifer
Yes
5
Liverpool Bay
UK
UK Hynet
Depleted gas
Future possibility – port nearby
4.5
Northern Endurance
UK
Net Zero Teesside Cluster
Aquifer
Future possibility – port nearby
4
Viking
UK
Viking CCS
Depleted gas field
Yes
10
Morcambe Bay
UK
Spirit Energy CCUS Hub
Depleted gas field
Future possibility – port nearby
10
Hewett
UK
ENI Consortium – Hewett Storage Site
Depleted gas field
Future possibility – port nearby
10
Unknown
Italy and
Augusta C2
Unknown
Unknown
Unknown
Greece
10
Wintershall Dea awarded second storage licence for CO2 in Norway, Wintershall Dea, 31 March 2023.
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3. Shipping routes and potential market
With five projects under construction, more than twenty under development and many more under
discussion, Europe has been one of the leaders in the CCS infrastructure growth over the last years,
leading the trend that has expanded globally, and especially in the US and China.
Due to geographical characteristics CO2 shipping is expected to play a crucial role in Europe for the
development of CCS. This contrasts with the United States and China where announced projects rely
mainly on onshore pipeline infrastructure. That is why leading European projects are progressing the
construction of CO2 carriers (three under construction and more under consideration/discussion with
the shipyards). These projects are also progressing construction of CO2 terminals, either for loading or
unloading CO2 at the emitting source or emitters’ hub side or at the storage side respectively. Plans
for CO2 transhipment terminals have also been revealed, but these are expected to materialise at a
later stage depending on how the carbon capture projects develop and on the availability of storage
sites.
The CO2 value chain for storage purposes depends on funding incentives or market-based measures
put forward by the EU and national governments to reduce industrial CO2 emissions. Reusing CO2 via
CCU could generate revenue streams and support the development of transhipment terminals and
the expansion of the CO2 transportation market. Incentives provided by the EU and UK ETS will be
crucial since emission allowances costs associated with CO2 transport by ship and permanently stored
can be avoided. Carbon credits for negative emissions associated with bioenergy with carbon capture
and storage (BECCS) and direct air capture with carbon storage (DACCS) represent another potentially
significant funding tool.
The Clean Air Taskforce map below illustrates CCS projects, both storage and industrial hub and
terminal type, that are either under construction or under development in Europe. Areas in dark grey
represent the geological formations with CO2 storage capabilities.
Figure 1: Europe Carbon Capture Project Map – Clean Air Task Force
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Based on this map Europe can be divided in three main areas:
a) the north-western area, where there is an abundance of available CO2 storage sites (due to
the concentrated oil and gas activities and the numerous offshore sites developed in the North
Sea over the last fifty years);
b) the central area, where there are potentially available geological formations with CO2 storage
capabilities, but with limited CCS project initiatives; and
c) the southern area, where there is limited availability of CO2 storage sites but where CCS projects
are already under development.
CO2 transport by ship is currently developing on a regional basis, where relatively large emitters (e.g.,
large cement plants with carbon capture rates of approximatively 1mtpa or more) get into long-time
charter agreements with specific storage site locations within short distances in the same region. The
ship transportation cost strongly depends on the volumes transported and the distance. Large
emitters located relatively close to storage sites can benefit from low ship transportation costs. On
the other hand, this model requires the construction of a dedicated liquefied CO2 loading terminal at
the emitters site, which is a highly CAPEX-intensive investment for emitters. This model may also entail
critical limitations to the ship’s design or operation due to the geographical location of the emitter and
any draught restrictions or operational disturbances due to passage through congested areas. With
respect to the conditions under which the CO2 is liquefied and transported (low pressure between 6-
8 barg, medium pressure 16-19 barg or high pressure 35-45 barg) this depends on:
a)
the volumes to be transported – larger ship sizes are easier and more efficiently designed and
constructed at low design pressures; and
b)
whether CO2 will be liquefied and stored at both the loading (emitter’s site) and unloading
(storage site terminal), which drives capital investment requirements for the storage tank and
the equipment needed, and also drives the operational expenses and procedures required for
maintaining an efficient supply chain.
CO2 well injection rates are expected to be much lower than the normal discharging rate for liquefied
CO2 ships, so buffer storage tanks will be required at the unloading terminal close to the sequestration
site. If the site is expected to receive liquid CO2 from various sources, then the required buffer storage
capacities will be high (3-5 ship cargoes – potentially as much as 100,000 tonnes of storage).
Whilst CO2 transportation can be undertaken in gaseous, liquid, or solid phase, the liquid phase provides
both the high density and ease of handling required for meaningful bulk transportation. Given the
temperature and pressure of its triple point (5.4 bar, -56 °C), CO2 needs to be pressurised to be in a
stable liquid state. This is a defining feature of its transportation. The transport of other gases can use
pressure as an alternative to lower temperatures; pressure is essential for CO2. The mass that can be
transported in a CO2 tank increases with the difference in density between the liquid and gaseous
phase. Counter-intuitively the mass of CO2 that can be transported in a given tank is lower at higher
pressure/higher temperature than it is for a lower pressure/low temperature condition.
Transport at higher pressure and ambient temperature requires less energy in the CO2 liquefaction
process (being more compression and less cryogenic) but requires a larger tank volume for the same
mass due to reduced density. Higher pressure transportation also allows greater tolerance of CO2
impurities, simplified loading systems due to the higher temperature envelope and facilitates potential
direct-to-store applications, further simplifying the value chain and potential speed of deployment.
13
Conventional wisdom was that medium pressure (MP) would be preferred up to 10,000 tonnes (being
the maximum size of very similar ‘Fully Pressurised’ LPG Carriers) and low pressure (LP) for larger
cargos. However higher pressure (HP) solutions, particularly for ‘direct-to-store’ applications are also
being developed and there is a credible prospect of both HP and MP carriers with up to 40,000 tonne
capacity.
The CO2 transport model described above has been adopted by early movers in northern Europe and
by developers in south-eastern Europe, mainly due to the small size of the market, its geography, and
the density of the emitters in these areas.
In the north-west of Europe, several governments have decided to incentivise the creation of clusters
(e.g
., the UK, the Netherlands or Denmark). This approach has stimulated the development of projects
for the construction of CO2 hubs and terminals, with CO2 collected and conditioned in large quantities
and either transported to nearby sequestration sites via pipelines or liquefied and transported via ships
to longer distances. This cluster model can support the development of carbon capture projects for
small emitters close to the loading terminal hubs. These hubs could move their CO2 either via pipelines
or containers (virtual pipeline concept), so the terminals will have to be capable to handle these multi-
modal transportation means. This concept is particularly likely to be adopted in north-west of Europe
due to the abundance of storage sites, as illustrated in Figure 1 above, but also due to the density and
distribution of emitters in the area, as described in the two figures hereafter.
14
Figure 2: Emitters registered in E-PRTR system –
Energy and Industry Geography Lab
Figure 3: The total 343 facilities for cement, lime, and other non-metallic minerals in Europe –
Mapping the cost of carbon capture and storage in Europe – Clean Air Task Force
The same model could be developed at a later stage in southern Europe to collect CO2 in large
quantities and ship them to northern Europe since, according to Figure 1, southern Europe lacks
storage capacities in existing geological formations with CO2 storage capabilities. Such a concept would
require significant governmental support to incentivise the development of the required
infrastructure and to overcome regulatory and social barriers like the London Protocol and/or local
15
community acceptance.
In central Europe where there is no direct access to either onshore/offshore sequestration sites or to
any of the CO2 collection hubs, inland waterways could provide a possible transport solution, especially
for emitters along the main rivers like the Rhine, the Danube, and the Elbe.
There may be significant limitations to the large-scale deployment of this transportation mode – with
issues such as the maximum allowable tonnage, draught restrictions, speed limits, and the stops
expected at locks in some specific segments presenting significant challenges and, as a result, the
transportation cost per tonne of CO2 is expected to be higher than in the open sea.
Another concept where inland waterways transport could potentially play a role is a multimodal
transportation model with CO2 containers transported via trucks, train, and ships/barges, which could
find application for small emitters. Further research is required in this field.
Figure 4: Map of the European inland waterway network
Figure 5 below describes the potential CO2 shipping routes as described in the various project
proposals announced over the last few years. In the North Sea a complex network of loading,
unloading and/or transshipments terminals has been proposed and the aggregate CO2 shipping
transportation volumes in this region could reach 25-30 mtpa for the 2030-2035 period (see section
2.1), and expand above 50 mtpa from 2040 onwards.
In southern Europe these volumes are not expected to exceed 10 mtpa by 2035. It is not clear how
16
this capacity could expand towards 2040 since the storage capacity is limited and there is currently no
clear plan for large emitter hubs development and long transportation to other regions.
Figure 5: Potential CO2 shipping routes.
Determinants of shipping capacity
The purpose of this section is to set out the influences on CO2 shipping requirements and provide a
basic indicator of the numbers and capacity of carriers required for a range of transportation distances
applicable for CCS in northwestern Europe.
The main determinants of shipping capacity for a particular operation are identified hereafter:
• Cargo
o Volume – rate per year and regularity (consistency throughout year)
o Distance by navigable route between loading and discharge ports
o Transport condition – if liquid, whether it be Low Pressure (LP), Medium Pressure
(MP) or High Pressure (HP)
• Gas carriers
o Cargo capacity – specifically mass of CO2 that can be loaded and discharged in the
normal operating cycle.
o Transit speed – in both loaded and unloaded conditions.
17
o Operating constraints – restricted waters and weather conditions.
• Loading and discharge ports
o Distance from open water – the time required at reduced speed and for
manoeuvring to and from the designated berth.
o Port and berth access constraints – tide, weather, congestion, pilotage and towing.
o Cargo transfer at the berth – pumping rate and pressure at loading port / receiving
rate and back pressure at discharge port.
o Reliability of delivering / receiving the nominated cargo parcel at the specified
time.
o Port availability – susceptibility to weather and availability of required port services.
o Prevailing weather conditions.
• Other factors include:
o Requirement to transit any restricted waterway, such as a river or a canal.
o Bunkering constraints – availability of the required bunker fuel at either the loading
or discharge port and any additional ‘offline’ time required to undertake bunkering.
o Number of carriers in the fleet – spare capacity to accommodate outages.
o Shore tank buffer capacity.
o Injection rate.
o Degree of ship transport resilience.
Most of these parameters are straightforward. The more complex ones are discussed in the
next section.
Transport condition – gas carriers
The capacity is determined by the total useable volume of the tanks and the shipping condition, as
explained above. Typically, the usable/pumpable volume is around 92-96% of actual volume for Type
C tank vessel, which allows for a cargo heal.
As explained previously CO2 can be transported in gaseous, liquid, or solid phase. However, the liquid
phase provides both the high density and ease of handling required for meaningful bulk
transportation. Given the temperature and pressure of its triple point (5.4 bar, -56 °C), CO2 needs to
be pressurised to be in a stable liquid state. This is a unique feature of CO2. Transportation of other
gases use pressure as an alternative to lower temperatures; pressure is essential for CO2 to be a liquid.
Counter-intuitively the mass of liquid CO2 that can be transported in a given tank is lower at higher
pressure/higher temperature than it is for a lower pressure/low temperature condition.
Transport at higher pressure and ambient temperature requires less energy in the CO2 liquefaction
process but requires a larger tank volume for the same mass due to reduced differential in densities.
Higher pressure transportation also allows greater tolerance of CO2 impurities, simplified loading
systems due to the higher temperature envelope and facilitates potential direct-to-store applications,
further simplifying the value chain and potential speed of deployment. High pressure (HP) vessel
solutions are also being developed that would be capable of facilitating shipping for direct to store
injection of CO2 without the need for energy-intensive cooling and liquefaction processes.
Conventional wisdom was that medium pressure (MP) would be preferred up to 10,000 tonnes (being
18
the maximum size of very similar ‘Fully Pressurised’ LPG Carriers) and LP above that. That boundary is
increasing, with the credible prospect of MP carriers with 20,000 tonne capacity.
The transit speeds for both the loaded and unloaded leg of the round trip have a direct impact on the
total cycle time as does time spent in port, at reduced speed, and any seen or unforeseen delays.
Whilst increased transit speed enables transportation of more cargo, it requires greater power with
increased emissions/larger energy storage.
Loading and discharge ports
The key factor is the time taken to either load or discharge the carrier taken from the moment of
reducing speed prior to entry and until regaining transit speed on leaving the port. This includes the
time required to enter the port, manoeuvre to, and moor up at the berth, connect transfer hoses,
undertake the cargo transfer, complete the loading and associated documentation, disconnect, un-
moor, leave the berth and exit the port. This will involve tug assistance and probably a pilot (depending
on familiarity). Additional time may be required due to port congestion, waiting for the designated
berth, bunkering if not able to be undertaken simultaneously and any scheduled or unscheduled
maintenance.
A further factor is the ability to receive the cargo parcel at the time of arrival. This will be largely
dictated by the regularity of CO2 arriving at the loading/onward transmission from the port and the
interim storage of the terminal itself. Based on offshore shuttle tanker operations, it is typical to
nominate a 3-day loading window for the cargoes scheduled for a calendar month at the beginning of
the previous month. For efficient terminal operations it is necessary to have enough interim storage
to receive a full cargo, facilitate the loading windows plus having a tolerance for un-scheduled
occurrences. It is debatable how much interim storage capacity will be required over and above the
designated parcel size but having at least 140% of the carry capacity is a good starting point. Having
unreliable CO2 inflow (or outflow for a discharge port), ports with significant non availability, and only
a small number of carriers in the system would be good reasons to have additional interim storage
capacity.
There is a clear benefit in having compatibility of carriers that are operating in the area with a
cooperation/backup arrangement to reduce the need for contingent capacity. Availability of the
desired bunker fuels at either the loading or discharge port is also important as is the ability to
undertake bunkering simultaneously with a loading or discharge operation.
Liquid CO2 carrier capacity and fleet requirements
The following provides an indication of carrier fleet requirements for a range of throughput, distances
between ports and carrier sizes. This is based on the following base assumptions.
Carrier
Speed
Liquid / ‘loaded’
13
knots
Gaseous / ‘unloaded’
13
knots
Utilisation factor
90
%
Loading Terminal
hours
Offload Terminal
hours
Hold time
6
Hold time
2
Passage in
4
Passage in
4
At berth
24
At berth
24
Passage out
2
Passage out
2
Total Time
36
Total Time
32
Figure 6 – Carrier fleet requirements
19
Figure 7: Impact of sea distances
Figure 8: Impact of carrier capacity
The fleet size is shown to one decimal place. Whilst the number of carriers required will always be
rounded up, the decimal provides an indication of the margin. For example, 5 mtpa transported over
1,000 nautical miles in carriers of 20,000 tonne capacity requires 7.1 carriers. However, if this can be
optimised by saving 4 hours in the cycle time, the requirement would drop to below 7. Whilst the
modelling of fleet and carrier requirements is relatively straightforward, the graphs above provide a
useful initial indication.
20
As an approximation, a 20,000-tonne cargo liquified CO2 ship with a one-week round trip time can
transport approximately one million tonnes of CO2 per annum, assuming there are no logistical nor
weather delays. There is a potential requirement of 6 to 40 dedicated vessels to serve the 2030
European market described in the previous section. These are likely to be related to separate emitter-
ship-store project contracts, with individual stores being involved in several different emitter projects. In
such an early and emerging market, it is likely that the vessels will be contracted for specific point-to-
point CO2 transportation work and will not be available for spot-market transportation of CO2 by 2030.
It is the subjective view of the authors that the number of vessels operational by 2030 will be in the range
10-20 ships.
21
3) Interoperability of CO2 transport by ship
1. CO2 specifications in the report ‘Guidance for CO2 transport by ship’
The Carbon Capture & Storage Association (CCSA) and the Zero Emissions Platform (ZEP) published a report called
‘Guidance for CO2 transport by ship’ in 202211. The key findings of this report are the following:
• The CCS value chain is complex, and decisions taken at one point in the value chain can have significant
technical and economic impact elsewhere along the value chain. A decision to ship CO2 liquefied at -50˚C
requires the emitter to purify the CO2 to a more rigorous standard than might otherwise be required. At this
early stage of the development of the liquified CO2 shipping market, it appears likely that two or more
“standards” of temperature and pressure and composition will be appropriate – most likely at a “low
pressure” of 5.5- 7barg and -50 ˚C or at a “medium pressure” of 15-18barg and -30˚C. The report notes that
some projects are considering transport at closer to ambient temperatures linked to direct ship-to-offshore
offloading.
• Some elements of CO2 phase behaviour are similar to liquified petroleum gas (LPG) which is already widely
transported by ship, although it is noted LPG does not solidify close to the transport conditions. Existing
standards for the transport of LPG and other liquified gases are largely fit- for-purpose for the transport of
liquified CO2 – indeed many standards specific to the transport of liquefied CO2 already exist. It is
recommended that the relevant standards and guidelines issuing organisations be requested to review their
specific standards and guidelines with a view to adapting them for the high-volume transportation of
liquified CO2 associated with CCS.
2. Additional considerations
From the perspective of ship transport, low pressure (with a corresponding low temperature) is considered as
optimal due to the high liquid density and low gas density12. Few studies have included the impact of CO2 stream
composition on ship transport. Engel and Kather (2018) considered the liquefaction of a pipeline CO2 stream13. They
found that an increased impurity concentration leads to an increased energy demand of the liquefaction process,
and to a shift from electrical to thermal energy demand for the injection. The relative merits of the three transport
condition categories, in the context of the full value chain are presented in the table below.
11
Guidance for CO2 transport by ship, CCSA and ZEP, 2022.
12 Aspelund et al.,
Ship Transport of CO2: Technical Solutions and Analysis of Costs, Energy Utilization, Exergy Efficiency and
CO2 Emissions, Chemical Engineering Research and Design, 2006.
13 Engel and Kathe
r, Improvements on the liquefaction of a pipeline CO2 stream for ship transport, International Journal of
Greenhouse Gas Control, 2018.
22
Advantages
Disadvantages
Low Pressure /
• Highest density of CO2 implies higher amount of CO2 per volume of
• Closeness to triple point of CO2 implies operational
Low
tank
risks, in particular dry ice formation
Temperature
• Wall thickness of tanks can be lower than for Medium Pressure and
• Higher quality material of tanks required to withstand
High Pressure reducing weight and cost
low temperatures
• Tanks can be larger than in Medium Pressure and High Pressure cases
• Insulation of tanks required to maintain low
as structural guidelines imply maximum tank sizes decreasing with
temperature
increasing pressure. This implies a lower number of tanks being
• Low Pressure CO2 transport case may limit the cargo
required for the same volume of shipped CO2
transfer velocity, which in turn take longer for
loading/discharge operation. This is yet to be fully
verified
• Preconditioning (heating and boosting pressure) of
low pressure LCO2 is required before injection process
Medium Pressure /
• Mature concept with many years of experience in the food and drinks
• Higher amount of steel in tank system required to
Low Temperature
sector
withstand higher pressure implying higher CAPEX and
• Higher density than High Pressure while lower operational
fuel cost of ship than for Low Pressure
complexity than Low Pressure due to sufficient distance from triple
• Structural challenges due to the maximum size of tanks
point
imply a maximum ship size of around 10,000 tonnes in
• Lower energy requirement for liquefaction than Low Pressure14
this condition
14
Comparison of CO2 liquefaction pressures for ship-based carbon capture and storage (CCS) chain, Youngkyun Seo et al., International Journal of Greenhouse Gas Control, 2016.
23
High Pressure /
• Lowest energy requirement for liquefaction
• Lowest CO2 density reducing the amount of CO2 per
Ambient Temperature
• No/less insulation of tanks and loading/unloading facilities required
volume of tank
as CO
•
2 is transported at ambient temperature
Tank/pressure containment system is heavier due to
• Scalable tank capacity as tanks are small and can be arranged
required increase wall thickness. For the same carrying
vertically to fit within a given ship hull
capacity (cbm) an LP/MP vessel will be smaller due to
• Lowest energy demand for conditioning as transport condition is
the higher density of CO2 at LP and MP
close to storage injection conditions
• Potentially higher impurity tolerance due to lower impact of
impurities on the phase envelope at higher pressure
Table 3: Transport categories – Advantages and disadvantages – NB: For all different transport conditions, appropriate mitigation measures should be taken to
ensure that the risk is as low as practically possible.
24
Composition - General considerations
The primary objective of CO2 shipping is to transport CO2 from an emitter to a storage site. As a result,
the cargo will be predominantly CO2. Lower limits must be defined for certain impurities, in particular for
water, but also for amines and glycols. Depending on the feedstock and the CO2 generating and capture
processes, CO2 streams captured from industrial sources or power generation contain various impurities
(that is, stream components other than CO2). The impurities differ in their concentrations but also in their
physical and chemical properties, which create several areas of concern:
• Health
o Impurities at low concentrations in the CO2 cargo may be toxic (
e.g., hydrogen
sulphide or carbon monoxide) and could have an impact on release. Impurities should
be assessed on a case-by-case basis.
• Safety/Integrity
o Minor components may be corrosive. For instance, components such as SOx, NOx,
O2 and H2S, can react together in the absence of free water to produce corrosive
components15. CO2 with free water creates carbonic acid, which is highly corrosive.
o Hydrogen can cause an embrittlement of steels.
• Phase behaviour
o Some impurities materially change the phase envelope of CO2, potentially creating
issues with keeping the CO2 in a liquid phase where the deviation of the phase
envelope from pure CO2 increases with decreasing temperature. This is illustrated in
the figure below.
Impurities can have a significant effect on the phase behaviour of CO2 streams in relation to their
concentration. Additional purification of the CO2 stream increases capture costs. Chemical effects also
include metal corrosion. The composition of the CO2 stream can also influence the injectivity and the
storage capacity, due to physical effects (such as density or viscosity changes) and geochemical reactions
in the reservoir. In case of a leakage, toxic and ecotoxic effects of impurities contained in the leaking CO2
stream could also impact the environment surrounding the storage complex (see ISO TR 27921).
15 Dugstad, Morland, and Clausen (2011
), Corrosion of transport pipelines for CO2 – effect of water ingress, Energy
Procedia.
25
Figure 9 - Phase diagram for binary combinations of CO2 and 2mol% H2, H2S, and NO2 calculated using the
Peng Robinson equation of state.
Published specifications for CO2 shipping
The following table shows two published CO2 compositions for shipping taken from the ZEP/CCSA report
published in 202216.
Component
Northern Lights17
EU CCUS Projects Network
Concentration (ppm
recommendations 1819
mol)
Carbon Dioxide (CO2)
Not defined
>99.7% by volume
Acetaldehyde
≤20
Not defined
Amine
≤10
Not defined
Ammonia (NH3)
≤10
Not defined
Argon (Ar)
Not defined
<0.3% by volume
Cadmium (Cd) / Titanium (Ti)
≤0.03 (sum)
Not defined
Carbon monoxide (CO)
≤100
<2000ppm
Hydrogen (H2)
≤50
<0.3% by volume (considered too high
and impractical for ship operations by
at least one operator)
Hydrogen sulphide (H2S)
≤9
<200ppm
Formaldehyde
≤20
Not defined
16
Guidance for CO2 transport by ship, CCSA and Zero Emissions Platform, 2023.
17
Quality specification for liquified CO2, Northern Lights, 2021.
18
Briefing on carbon dioxide specifications for transport, CCUS Projects Network, 2019.
19 This recommendation should be taken with caution. Hydrogen concentration only just below 0.3% by volume is
considered impractical for ship operations by at least one operator since the pressure/temperature regime is outside
of ship operations parameters.
26
Mercury (Hg)
≤0.03
Not defined
Methane
Not defined
<0.3% by volume
Nitric oxide / nitrogen dioxide (NOx)
≤10
Not defined
Oxygen (O2)
≤10
Not specified as literature is
inconsistent
Sulphur oxides (SOx)
≤10
Not defined
Water (H2O)
≤30
<50ppm
Table 5 - Two published CO2 compositions for shipping
Inter-related compositions and impacts
For streams that could be/are going to be mixed, limits must be defined in such a way that any possible
combination of streams cannot result in potentially dangerous mixtures when it comes to health and
safety, system integrity in general and corrosion specifically, potential storage impairment, and
operational procedures.
Material integrity
With various combinations and concentrations of potentially reactive impurities (H2O, NO2, SO2, H2S, O2),
it was clearly shown that many impurity combinations were basically inert, while other resulted in
chemical reactions and some combinations even resulted in the formation of a separate aqueous phase
that contained high concentrations of sulfuric and nitric acid as well
as elemental sulphur. This aqueous
phase was corrosive to carbon steel. The concentration limits for reactions and corrosion to occur vary
strongly with the type and number of impurities that are present.
Such testing is often performed at high pressures, reflecting the need for elevated pressures for injection.
For the investigated conditions, 100 bar and 25°C, the concentration limit for each impurity should be
below 20 parts per million by volume (ppmv) if NO2, SO2, H2S, and O2 are present together. This is to
provide a margin to the result that in the presence of 35 ppmv of SO2, O2, H2S, and NO2 resulted in
formation of a separate aqueous phase that contained sulfuric and nitric acid, acids that are highly
corrosive. If either H2S or particularly NO2 was removed, these reactions did not occur, and will allow the
limit on other impurity concentrations to be increased. Limits must be defined in such a way that any
possible combination of streams cannot result in potentially dangerous mixtures (when it comes to health
and safety, corrosion, and operational procedures). Materials must be selected in such a way that they
are suitable for CO2 within the defined limits for impurities.
Phase envelope
The presence of “non-condensable substances”, N2, Ar, H2 and CH4 belong to this category (ISO/TR
27921), impacts the phase envelope in a cumulative way. This means that their maximum allowable
concentration by individual component cannot be uniquely defined as it is possible to allow different
quantities of different non-condensables and still be within an acceptable phase envelope impact.
27
Assessing the cumulative “functional impact” is a preferable approach towards minimising the overall
cost than selecting arbitrary values for components that have different impacts and should not be defined
singularly. An example of such approach is to define the limit as a minimum temperature on the saturated
liquid line considering the cumulative effect of all non-condensable components, although this may need
to be referenced to a specific transport condition (LP, MP, or HP).
Optimisation of CO2 stream composition based on techno-economic assessments
The impacts of various impurities and combinations of impurities on the individual steps of the CCS chain
have been outlined in the previous sections. If impacts of impurities in individual components of the CCS
chain are known, CO2 stream composition could be adjusted to avoid undesirable impacts. Optimisation
of CO2 stream composition along the CCS chain could ensure safety of transport, injection and storage
while reducing energy consumption and costs of the CCS chain operation. This optimisation could be
realised by way of various options for the technical design of the CCS chain.
To assess various transport network design options, techno-economic assessments have proven to be a
valuable tool. In general, pipeline specification of CO2 will be less onerous than for shipping. Few studies
exist that assess impacts of impurities along the whole CCS chain. For projects that require both pipeline
and ship transport of CO2, a project-specific study will be required to optimise CO2 stream composition.
The cost challenges associated with CCS are well documented and will be covered further in this report.
Some of the CCS costs are associated with the “purification” of the CO2 stream to meet some of the
published specifications. A Joint Industry Project (JIP) led by DNV recognises this fact and, as part of its
objective, states “
it is desirable to limit the need for cleaning CO2 from the various industry emitters of
harmful impurity elements by keeping its composition as wide as possible without jeopardizing the risk
of corrosion and material degradation”. Whilst this JIP is pipeline specific, the statement is equally
relevant for transport by ship20.
Conclusions on composition specification and infrastructure reuse impact
A European transport grid requires universal rules for allowable concentrations. The CCUS Forum report
on CO2 specifications recommends to “develop as rapidly as possible a network code and standards for a
multimodal CO2 transport network in the EU/EEA”21. The authors recognise that the CO2 from some
projects will be transported via pipeline before being transported by ship. This may require additional
processing of the CO2 at the port prior to loading on a ship.
For a pure shipping project (point source-to-point sink project), concentration thresholds are case-specific
and subject to optimisation for the entire CCS process with respect to safety and environmental
protection, costs, and energy demand (see ISO TR 27921).
20
Design and Operation of CO2 pipelines – CO2SafePipe, DNV.
21
‘An Interoperable CO2 Transport Network – Towards Specifications for the Transport of Impure CO2’, CCUS Forum,
2023.
28
Selecting the optimum transport conditions and composition for an individual project – key aspects to be
considered by each project
The following table seeks to identify the key factors that must be considered:
Factor
Impact
CO2 production rate by a cluster
What are the production rates in the initial phase and how can
and the phasing of growth
shipping support this and the longer-term projected growth
Reservoir
Different reservoir characteristics may become a challenge for a
European solution – this aspect requires further investigation
Optimal ship parcel size versus
Optimum vessel size for a particular project will determine the
onshore storage requirements
onshore buffer storage requirement. Using smaller or larger vessels
will result in inefficiencies but development of standard sizes will
allow use of vessels across different routes. Such flexibility will
provide additional redundancy and support open-market
development over time.
Shipping pressure and
Conditions of the CO2 gathering network impact on the amount of
temperature that determines
processing required for liquefaction
the liquefaction process
Availability of a suitable, preferably green, energy source for the
required
liquefaction process
Liquified CO2 storage design, including pumping system
CAPEX and OPEX of the liquefaction process
Shipping travel times from the
The travel time will impact the size and number of vessels which in
emitter / cluster to a CO2
turn determines the amount of storage at the loading and unloading
storage provider
terminals. This will be optimised for each project.
Dense phase
Energy-efficient regasification for injection is an important point
(using heat from seawater is a possibility that should be
investigated). Regasification that relies on the direct use of
electrical power would be costly.
Standard specification and
Physical testing needs to be carried out to test impurities and their
impurity limitations
impact on phase behaviour. The aim is to have an industry
standard (which could include component-by-component limits
and/or cumulative impact limits) for composition for carriage
conditions for HP, MP and LP.
Table 6: Key shipping aspects to be considered
29
3. IMO, SIGTTO, and CEN work on standards for CO2 transport by ship
The European Committee for Standardization (CEN) created a new Technical Committee on CO2 capture,
transportation, utilization, storage (CCUS) and carbon accounting in November 2023. CEN stated that
“international standardization activities on CCUS are developed in ISO/TC 265. The proposed new CEN/TC
aims to build on existing ISO/TC 265 standards, supplementing them with homegrown documents tailored to
the needs of European stakeholders. Through establishing liaisons with the relevant CEN and ISO Technical
Committees, the standardization activities will be coordinated, and collaboration will be encouraged to avoid
duplication of work or conflicting requirements”22.
The Society of International Gas Tanker and Terminal Operators (SIGTTO) submitted paper CCC 8/10/1 to the
IMO Sub-Committee on Carriage of Cargoes and Containers (CCC) about the triple point and the toxicity of
liquified CO2 transportation. Furthermore, SIGTTO submitted paper CCC 9/4/3 to clarify the understanding
about how regulations in IGC Code shall apply to exclusive CO2 carriage.
Flag state delegates agreed about the proposal of liquid CO2 triple point. Most major flag states and industry
bodies agreed that the significant issue with CO2 is toxicity, but also worry about the deletion of asphyxiation.
An additional discussion about waivers of IGC Code requirement especially Ch.11 was carried out. Not all toxic
cargo requirements should be applied to CO2, and the retroactivity should also be considered. Considering
the limited time and the process of CCC meeting, these details will be discussed in correspondence group and
settled down in CCC 10 (2024).
22
A new CEN/TC will develop standards for carbon capture, utilization and storage, CEN-CENELEC, 2023.
30
Application
IGC Code Chapter
Remarks
for CO2
1 – General
Applicable
-
2 – Ship survival capability
Applicable
-
and location of tanks
3.1.2 and 3.1.3 – A single gastight bulkhead A-0 class
may be sufficient
3.2.5 – A-60 Class may not be required
3.2.6 – Air inlet and outlet capable of being operated
from inside the space
3 – Ship arrangements
Applicable
3.3.1 – May not require explosion prevention.
Consider SOLAS II-2/9.2.3 for fire protection
3.8.2 – Bow cargo transfer may be allowed
3.3.4 – Bulkhead may not be required
3.6 – Airlocks may not be required
4 – Cargo containment
Applicable
-
5 – Process pressure
vessels and liquids, vapour
Applicable
5.7.4 may not be required
and pressure piping
systems
6 – Materials of
construction and quality
Applicable
-
control
7 – Cargo
If a flammable or more toxic refrigerant is used then
pressure/temperature
Applicable
this should be highlighted in the risk assessment
control
8 – Vent systems for cargo
Applicable
-
containment
9 – May not require inert gas. Dry air may be
9 – Cargo containment
Significant
required to prevent condensation in cargo tanks and
system atmosphere control Exclusions
piping
9.3 – Dry air to prevent condensation in space
10 – May not require any measures for fire
Significant
10 – Electrical installations
prevention from cargo
Exclusions
10.2.6 – should be applied
11 – May not require fire protection and extinction
11 – Fire protection and
Significant
from cargo. May be able to use SOLAS requirements
extinction
Exclusions
for general cargo vessels
12.1.1– Required
12 – Artificial ventilation in
Applicable
12.1.7– May not require explosion prevention.
cargo area
12.1.9 – May not apply
13 – Instrumentation and
Applicable
13.6.5; 13.6.6 should be applied
automation systems
31
14.3.2.4; 14.4.3 may not apply
14 – Personnel protection
Applicable
14.4.2; 14.4.4 should be applied
15 – Filling limits for cargo
Applicable
tanks
16 – Cargo cannot be used as fuel. Other type of fuel
Not
16 – Use of cargo as a fuel
used will require additional measures and may
applicable
require reinstating requirements for other Chapters
17 – Special requirements
Applicable
-
18 – Operating
Applicable
18.10.3.2 – may not required
requirements
Recommended changes are given in Table 7.
19 – Summary of minimum Applicable
Reclaimed quality does not require a separate column
requirements
and can be captured in the text of the IGC Code
Table 7: Suggestions for the application and improvement of the IGC Code
A
b c
d
e
F
g
h i
Product
Ship
Independent Control of
Vapour
Gauging
Special
name
type
tank type C
vapour
detection
requirements
required
space
within
cargo tanks
Carbon
3G
-
-
A T
R C
14.4.2,
dioxide (high
14.4.4
purity and
17.21,17.22
reclaimed
quality)
Carbon
3G
-
-
A
R
17.22
dioxide
(Reclaimed
quality)
Table 8: Suggested changes to IGC Code summary of minimum requirements23
The International Convention for the Safety of Life at Sea (SOLAS) Chapter III 31.1.6 should also be
updated.
Industry guidance
Very little industry guidance is written specifically for CO2 and what is written for other gas carriers cannot
simply be applied to CO2 without review. The documents in this section are valuable and can provide
general guidance.
Manifolds
23 Based on the summary of minimum requirements in Chapter 19 of the IGC Code.
32
Recommendations for Liquefied Gas Carrier Manifolds specify the size and arrangement of cargo
and bunker manifolds. This is used by loading arm manufacturers and terminal designers to design
terminals.
Marine loading arms
Manufacturers design loading arms to ensure that they do not exceed the loads specified in Design
and Construction Specification for Marine Loading Arms. Designs should consider the density of CO2
as it is heavier than other liquefied gases typically used in the industry.
The guidance in the Oil Companies International Marine Forum (OCIMF) document can be useful for
CO2, along with the following considerations:
• The material should be suitable for possible impurities and the minimum temperature that
can be reached in an emergency, i.e., stainless steel is recommended for dry ice.
• Credible scenarios should be considered to determine if emergency release is necessary.
• If an emergency release system (ERS) is fitted, then it should be designed to release under
pressure.
• The swivel joint should be designed to prevent damage from dry ice if there is a leak.
• Pressure loss in the system derived from cargo transfer velocity, piping diameter, CO2 density
and CO2 viscosity should be considered.
Emergency shutdown systems
The purpose of SIGTTO’s recommendations in ESD Systems is to reduce risk in process systems. This
will help to minimise the consequences of an incident. CO2 carriers should follow the
recommendations in ESD Systems, except for sections on gas burning in the engine room, liquid sensor
in vent mast and firefighting triggers.
Mooring
Mooring Equipment Guidelines provides a standardised approach for gas carriers and terminal
moorings and should be suitable for CO2 carriers, and terminals.
Alarm management, human-machine interface, and cargo control room
SIGTTO recommendations for alarm management, human-machine interface (HMI) and cargo control
rooms (CCRs) provide good design practice for gas carrier CCRs and alarm systems. The guidance in
these documents is recommended for CO2 carriers.
Training and experience
Structured classroom training should be carried out to educate the crew on the specific hazards of CO2
operations. Training should cover safety, contingency planning, and all routine operations. The training
programme should be similar to LPG Shipping Suggested Competency Standards.
33
4. CCNR work on CO2 transport
A second edition of the International Safety Guide for Inland Navigation Tank-barges and Terminals
(ISGINTT) was published in 20236. The Central Commission for the Navigation of the Rhine (CCNR)
published a roadmap on reducing emissions in inland navigation in 2022242526.
The transport of CO2 as a dangerous substance is regulated by the European Agreement concerning
the International Carriage of Dangerous Goods by Inland Waterways (ADN) agreement, for which the
CCNR acts as co-secretariat27. The ADN is a European agreement regarding the transport of dangerous
goods on inland waterways. There is no CCNR working group on the issue of the geological
sequestration of CO2. The CCNR's work is aimed at reducing emissions from the current fleet (CO2 and
other pollutants). The CCNR have applied for LCO2 shipping by inland barges to be included as a
dangerous good in the ADN list. Member countries apply with the governing body in Geneva to have
the listing amended. This process can take more than two years.
24
International Safety Guide for Inland Navigation Tank-barges and Terminals (ISGINTT), 2023.
25
CCNR roadmap for reducing inland navigation emissions, Central Commission for the Navigation of the Rhine, 2022.
26
Key points of the CCNR roadmap for reducing inland navigation emissions, Central Commission for the Navigation of
the Rhine, 2022.
27
European Agreement concerning the International Carriage of Dangerous Goods by Inland Waterways, United
Nations Economic Commission for Europe, 2023.
34
5. Potential gaps on CO2 specifications for ship transport
As mentioned above the deployment of a European transport grid will require universal rules for
allowable concentrations. It is possible to distinguish between transport modes. This implies accepting
hubs with further CO2 treatment at points where transport modes change. This will be a more effective
solution than fulfilling all constraints resulting from all transport modes at any point in the network.
It is recommended that the early technical focus is on impurities that are the most likely to be found and
which are likely to influence the corrosion regime. These impurities would be associated with industries
for which long-term CO2 capture remains the most likely option, including hard-to-abate sectors such as
cement, steel, waste-to-energy, chemicals, blue hydrogen and dispatchable power options. These should
be carried out in multi-impurity tests, NH3, CO and HCN are examples of impurities that could be expected
at relevant concentrations. Sulphur containing species could in principle react and contribute to the total
SO2 level and should be particularly focused on (e.g., mercaptans, thiols, carbon disulphide or carbonyl
sulphide).
Using impurities within these streams, defining how they exit the expected capture processes, plus any
further potential contamination of the CO2 from the capture process itself, may help constrain the
concentration range and number of impurities that need to be further studied. More research work
should be undertaken to gather additional data and map the CO2 stream compositions from all possible
emitters28. Direct air capture has been excluded from this list because of the relatively early stage of
development and the relative flexibility of its location.
Furthermore, the current guidelines are only provided at “typical” pipeline conditions, the evaluation of
the corrosion impact of the potential impurities needs to be extended to the full value chain, in particular
to the transport conditions of low and ambient temperature transport and the conditions likely to be
encountered within the well, during both during injection operations and shut down.
The work done to date (see Figure 3 from the earlier CCSA/ZEP report) shows that acids are less soluble
at lower temperatures and less soluble at pressures below 100 bar. The current ‘guidelines’ may therefore
not be conservative enough for some shipping temperature conditions. Only one paper, studying the
corrosive effects of one combination of impurities at low temperature, confirmed that the reaction
mechanisms observed in the pipeline were also valid for this lower temperature condition29. Further work
includes an assessment of corrosion implications against the grade of steel used for low temperature
transport since this grade is likely to be different from the grade used at warmer transport temperatures.
Similarly, the grades of steel that are expected to be used in the well injection tubing will need to be
defined and included in the test work.
28 Such work includes, for instance, the Wood Joint Industry Project “Industry Guidelines for Setting the CO2
Specification for CCS Chains”. This work is ongoing and not published at this time.
29 Tjelta, Morland, Dugstad, and Svenningsen,
Corrosion reactions in simulated CO2 ship transport conditions,
CORROSION 2020, 14 June 2020.
35
In summary, the following measures can be recommended for future research work:
1. Evaluate the likely impurities (substance and concentration) in CO2 emitted and captured from
the flowing industries, cement, steel, waste-to-energy, chemicals, blue hydrogen and likely
dispatchable power options, including impurities from the prominent capture processes.
2. Use the output from point 1 and the learning from the evaluation of the interaction between
the impurities H2O, NO2, SO2, H2S, O2, to evaluate the impact of other impurities at different
concentration whose interactions could generate new corrosion risks or contribute to the acid
generating interactions already identified. Provide guidelines on limits of respective
combinations and “relaxation options” as per the original work.
3. Repeat the original corrosion risk evaluation and any additional corrosion risk identified in
point 2 at the conditions (temperature and pressure) of the potential transport conditions
(low and ambient temperature) as well as conditions likely to be encounter in the well during
injection operations and whilst shut down. Highlight any differences/amendments,
particularly more restrictive compositional limitations, necessary to the guidelines on limits of
respective combinations and “relaxation options” in point 2 associated with the different
transport or well conditions.
4. Evaluate the corrosive impact of impurities, which have been studied on the basic grade of
carbon steel and consider the impact of other steel grades or alloys that are likely to be
selected, either because they are required for low temperature transport conditions or are
used in the wells for either temperature or used as mitigation measures, where the well could
be exposed to higher water content originating from the reservoir rather than the injected CO2.
5. The following anti-corrosion measures should be considered to safeguard containment
integrity:
1) Material upgrading (stainless steel of certain composition that is suitable for
36
small tanks);
2) Additional thickness of the plate and extra thickness will depend on points 2 and
3 of the analysis above;
3) Suitable coating of the areas internally more prone to corrosion (e.g., bottom,
cargo well, others);
4) Cathodic protection in way of areas more prone to corrosion (see above); and
5) Optical or other principal continuous monitoring of pH, aqueous phase
formation; set point value will depend on 2&3 analysis above.
Safety risk
The current approaches available to assessing the risk of a CO2 release to individuals is covered in the UK Health
and Safety Executive document ‘Methods of approximation and determination of human vulnerability for
offshore major accident hazard assessment’. This document offers two methods of assessing risk, using the
‘Probit Functions’, or using the data for specified level of toxicity (SLOT) and significant likelihood of death
(SLOD). Both of these methods evaluate the risks of the components on an individual basis. However, it is
known that carbon dioxide induces increased respiration rate at above 2% concentration (50% respiration
increase) and the respiration rate doubles at 3% concentration. In addition, the increased concentration of
CO2 produces oxygen depletion, and this can increase the uptake of other toxic components present in the
atmosphere.
To date there is no known publication or specific guidance on the impact of the impurity when combined with
the presence of ‘bulk’ CO2. It may be that, for shipping, the relatively high purity of CO2 required negates this
risk as the allowable concentration of other impurities is relatively low and may be more relevant for pipeline
projects that can tolerate high impurity concentration, but this could still be valid for port facilities that receive
inputs from both pipeline and shipping.
Conditional recommendation
If data is not available and the risk is confirmed, the recommendation would be to establish concentrations
of other toxic components individually but in the presence of bulk CO2 (and the impact that bulk CO2 has on
the individual component).
37
4) Barriers and enablers for the commercialisation of CO2 transport by ship
1. Regulatory barriers to a European market for CO2 transport by ship
Several interlocking international legal instruments regulate the transboundary shipment of CO2. While recent
international and European law developments support CCS and CCU, three elements of the applicable legal
frameworks require further attention to incentivise transboundary transport and sub-seabed storage
activities within Europe, as well as between European and non-European countries. The present chapter
focuses on, firstly, regulatory barriers emanating from the Convention on the Prevention of Marine Pollution
by Dumping of Wastes and Other Matter of 1972 (the “London Convention”), and the 1996 Protocol to the
London Convention (the ‘London Protocol’)3031. Secondly, the chapter identifies barriers to CO2 transport
emanating from the 1996 International Convention on Liability and Compensation for Damage in Connection
with the Carriage of Hazardous and Noxious Substances by Sea and its 2010 Protocol (‘HNS Convention’).
Finally, it considers how the EU Emissions Trading System (EU ETS) applies to certain shipping related CCS/CCU
activities.
Prevention of Marine Pollution by Dumping of Wastes
International rules on marine pollution regulate transboundary shipping and maritime geological storage of
CO2. For example, the 1982 United Nations Convention on the Law of the Sea obliges its parties to “prevent,
reduce and control pollution of the marine environment by dumping”32. The London Convention and the
London Protocol are additional treaties restricting maritime dumping. Moreover, regional agreements—
including the 1992 Convention for the Protection of the Marine Environment of the North-East Atlantic
(“OSPAR Convention”)—regulate marine polluting activities33.
The 1972 London Convention and 1996 London Protocol
In 2019 the countries of the London Protocol took steps to enable the transboundary movement of CO2 for
CCS activities. This has removed a key barrier to the development of CCS projects which are seeking to use
ships to move CO2 between countries.
The London Convention was one of the first international treaties on protecting the marine environment. It
sought to place limitations on the uncontrolled dumping of waste at sea. Generally, under the London
Convention, disposal of certain types of wastes was prohibited outright, whilst other wastes were subject to
prior permitting.
Despite its innovative legal framework, some observers criticised the London Convention for its perceived lack
of ambition and regulatory stringency in controlling marine pollution. Following this, states agreed the London
Protocol in 1996 (it entered into force in 2006) to modernise and eventually replace the London Convention.
30 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1972 (opened for
signature on 29 November 1972, entered into force on 30 August 1975) 36 ILM 7.
31 1996 Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter
1972 (opened for signature on 7 November 1996, entered into force 24 March 2006) 36 ILM 7.
32 Article 194(1), United Nations Convention on the Law of the Sea, opened for signature on 10 December 1982
(entered into force on 16 November 1994).
33 Convention for the Protection of the Marine Environment of the North-East Atlantic (opened for signature on 22
September 1992, entered into force on 25 March 1998).
38
Most EU member states and European Economic Area (EEA) countries are contracting parties to the London
Protocol. Although the USA is a party to the London Convention, it has not yet ratified the London Protocol.
Compared to the London Convention, the London Protocol’s dumping regime raises environmental ambition
by operating on a “positive listing” basis34. This approach means that the Protocol prohibits any dumping of
any wastes or other material at sea, unless the type of material falls within an exception listed in Annex 1. Any
permitted disposal is subject to adequate regulation and the issuance of permits by its parties.
Significantly, the London Protocol also widens the definition of “dumping” to include “any storage of wastes
or other matter in the seabed and the subsoil thereof”. The parties have resolved that offshore CCS activities
constitute a prohibited form of dumping under the London Protocol. The London Convention’s and London
Protocol’s scope covers all marine waters, other than the internal waters of states and “sub-seabed
repositories accessed only from land”35. Notably, Article 6 also prohibits the export of waste for the purposes
of dumping at sea. Its rationale is that prohibiting dumping alone is not effective if waste can be exported for
dumping by another state.
The 2006 and 2009 Amendments
An amendment to Annex 1 of the London Protocol in 2006, proposed by Australia, the UK, Norway, France
and Spain, added captured CO2 streams—which “consist overwhelmingly” of CO2 (and “no other waste
or matter”) disposed into sub-seabed geological formations—as a category of waste to the list of
exceptions permitted for disposal at sea. This exception is subject to adequate permitting, monitoring,
and risk assessment outlined in Annex 2. The amendment entered into force for all contracting parties in
2007, making offshore carbon storage permissible under international law.
Subsequently, the International Maritime Organization (IMO) examined the feasibility of cross-border
exports of CO2 for CCUS purposes. Its secretariat concluded that Article 6 of the London Protocol had
initially intended to prevent contracting parties from exporting waste to non-parties (in attempts to
circumvent the London Protocol’s controls). However, it noted that the article could pose a significant
barrier to deploying CCUS projects. The export prohibition enshrined in Article 6 would capture all exports
of CO2 designated for storage at sea – including to the London Protocol’s contracting parties – rather than
merely exports to non-parties. In 2009, the contracting parties adopted an amendment, adding a new
paragraph to Article 6 allowing countries to export and receive CO2 for offshore geological storage (the
“2009 Amendment”).
The 2009 amendment applies two main conditions to such exports:
1. Firstly, there must be an agreement or arrangement between the countries concerned,
allocating permitting responsibilities between the parties36.18 For exports to non-contracting
34 Article 4, London Protocol.
35 Annex 1, paragraphs 1.8 and 4, London Protocol, as amended by IMO Resolution LP.1(1) (Adopted on 2 November
2006).
36 The IMO parties clarified the responsibilities of parties and requirements of the agreements and arrangements which
must be entered into by Parties and non-Parties wishing to undertake export of CO2 in its 2013 Guidance on the
Implementation of Article 6.2 on Export of CO2 Streams for Disposal in Sub-seabed Geological Formations for the
Purpose of Sequestration, LC 35/15, Annex 6 (2013). In particular, a contracting party is responsible for issuing permits
where a CO2 stream is loaded onto a vessel in its territory, and also where a vessel flying its flag loads a CO2 stream in
the territory of a non-Party for export to another country. In the case of exports to non-parties, it is the full
responsibility of the contracting party to ensure “that the provisions of the agreement or arrangement would need to
39
countries, such an arrangement must include provisions consistent with the London Protocol
(including the minimum regulatory requirements prescribed in Annex 2)37.
2. Secondly, parties to such an agreement or arrangement must notify the IMO38.
The 2009 Amendment allows countries wishing to participate in CCS and CCU activities—but which do
not have access to offshore storage sites within their national boundaries—to do so under international
law. However, the 2009 Amendment’s entry into force requires ratification by two-thirds of the London
Protocol’s contracting parties (or 36 countries), which has not yet happened. Ten parties have ratified the
2009 Amendment: Norway, the UK, the Netherlands, Iran, Finland, Estonia, Sweden, Denmark, Belgium,
and the Republic of Korea.
In the interim, the parties adopted a resolution in October 2019 allowing provisional application of the
CO2 export amendment to Article 639. Provisional application means that any party may implement the
Article 6 amendment before the article’s formal entry into force. The IMO reports that Belgium, Norway,
the Netherlands, Denmark, Sweden, the Republic of Korea, and the United Kingdom have commenced
provisional application of this amendment. Nevertheless, some commentators have suggested that this
is not the most appropriate solution, and that the contracting parties should have instead issued an
interpretative resolution stating that Article 6 does not apply to cross-border transfer of CO2. In the latter
case, no formal amendment would be needed40. In any case, the 2019 resolution removed the last
significant international legal barrier to the export and receipt of CO2 for offshore storage. The first
bilateral agreement under Article 6 of the London Protocol (as amended by the 2009 Amendment) was
signed between Belgium and Denmark on 26 September 2022. Other countries have also declared plans
to formalise bilateral arrangements (including Belgium and Norway, Norway and Sweden, as well as the
UK and Norway)41.
Other types of international law arrangements can satisfy the requirements of Article 6.2 (as amended by
the 2009 Amendment). For instance, in September 2022, the European Commission published a paper on
the compatibility of EU law and the London Protocol requirements42. The conclusion stated by the
European Commission in the paper is that EU law, and the EEA legal regime incorporating relevant EU
law, are sufficient to constitute “an arrangement” under the amended Article 6 of the London Protocol.
The European Commission’s view is that any bilateral arrangements should be limited to residual matters
falling outside EU law. On this interpretation, arrangements between EU/EEA member states that are
contracting parties to the London Protocol would only require limited bilateral agreements. The bilateral
agreement between Belgium and Denmark is one example of such an agreement. This position was held
by the European Commission in a report published in 2023, stating that “any operator of CO2 transport
reflect the appropriate permitting responsibilities of each”. This requirement ensures the same level of environmental
protection when a non-party stores a party’s CO2.
37 It is also understood that the bilateral agreement is only required for storage and that a ship carrying CO2 can pass
through territorial waters of a third country without such country being required to either deposit a declaration, or
enter into a bilateral agreement.
38 IMO Resolution LP.3(4) (Adopted on 30 October 2009).
39 IMO Resolution LP.5(14) (Adopted on 11 October 2019).
40 Viktor
Weber, Are we ready for the ship transport of CO2 for CCS? Crude solutions from international and European
law, 2021, RECIEL 387.
41 Naida Hakirevic Prevljak, How can Europe and Norway cooperate to scale up the CCS market?, 3 October 2022,
Offshore Energy.
42 European Commission, EU
– London Protocol Analysis paper final 0930, 30 September 2022.
40
networks and/or CO2 storage sites enjoys the full benefit of the EU legal framework to import or export
captured CO2. The implemented EU legal framework acts as the relevant “arrangement” between the
Parties in the meaning of Art. 6(2) of the London Protocol, given the substantive alignment with the
requirements of the London Protocol”43.
Consequently, we might consider that any regulatory barriers emanating from the London Protocol flow
from a lack of political will by contract parties, as opposed to any inherent regulatory issues. Put
alternatively, it is not so much the London Protocol regime that precludes the shipping of CO2 for storage.
Instead, the lack of coordinated efforts by contracting parties to ratify, provisionally apply, or enter into
bilateral agreements impedes the implementation of the 2009 Amendment. However, as governments
increasingly recognise the importance of CCUS as part of their energy strategies and decarbonisation
efforts—and major cross-border CCUS projects are under development—we only envisage more
arrangements facilitating cross-border movement of CO2 for storage soon.
Nevertheless, countries’ insufficient domestic regulatory and bilateral efforts pose challenges to
deploying international CCUS projects. Many countries have not yet ratified the London Protocol,
including the USA, India, Indonesia (and most of South-East Asia), Russia, Brazil (and most of South
America), as well as most African states. Their ratification status does not preclude those countries from
exporting CO2 streams to London Protocol contracting parties. However, it may complicate CO2 exports to
non-contracting parties, as the bilateral agreements underpinning those exports must likely include
detailed provisions incorporating safeguards consistent with the London Protocol.
ZEP recommends that European countries that are parties to the London Protocol deposit a notice of
provisional application of the CO2 export amendment with the IMO to enable the development of cross-
border CO2 transport in Europe.
OSPAR Convention
Regional instruments, such as the Convention for the Protection of the Marine Environment of the North-
East Atlantic (“OSPAR”)—which include the EU countries, Iceland, Norway, Switzerland, and the UK as
signatories—are also relevant. In particular, OSPAR regulates the storage of CO2 in geological formations
under the seabed44. The OSPAR Parties have set out minimum standards on CO2 marine disposal activities
and published guidelines on risk assessment and management. Importantly, there is no export prohibition
on wastes under OSPAR.
CO2 Transport under the Convention on Hazardous and Noxious Substances
The Hazardous and Noxious Substances (HNS) Convention has 45 signatories. It intends to establish an
international liability framework for hazardous and noxious substances. The HNS Convention’s provisions
were modelled on the international legal regime applicable to the carriage of oil and gas. While neither
the Convention, nor its 2010 Protocol, has entered into force, six states (Canada, Denmark, Norway, South
Africa, Turkey, and Estonia) have now ratified both agreements45. While fewer than the 12 states are
43
Report on Implementation of Directive 2009/31/EC on the Geological Storage of Carbon Dioxide, 24 October 2023,
European Commission.
44 Article 5, OSPAR Convention (1992).
45 Under the agreement, the NHS Protocol will enter into force 18 months after the date on which it is ratified by at
least 12 states, including four states with not less than 2 million units of gross tonnage, and having received during the
41
needed for entry into force, the IMO anticipates several additional states may ratify the agreements
immediately, enabling entry into force shortly46. Upon entering into force, the HNS Convention will apply
to ships carrying CO2, with the regulation of liquified bulk CO2 falling within its regulatory scope47.
However, the maritime transportation of CO2 for CCS and CCU purposes was not envisioned during
negotiations of the HNS Convention. As a result, CO2 transport would fall under the HNS regime. This
regime is arguably inappropriate for early-stage CO2 transportation activities, particularly given the
anticipated low environmental risk profile of CO2 streams transported by sea48.
The HNS Convention imposes liability on ship owners to compensate those suffering loss or damage from
an HNS incident. This includes liability for accidents in which fault rests with third parties49. The HNS
Convention limits ship owners’ liabilities to a certain amount, beyond which the HNS Fund compensates
those affected parties. Each limit depends on the ship’s size and the cargo type50, and is denominated in
terms of Special Drawing Rights (“SDRs”). An SDR is a supplementary international reserve asset, created
by the International Monetary Fund. The IMF defines the SDR as equivalent to the value of a basket of
world currencies. IMF members can hold and exchange SDRs for currency, when required. The applicable
limits apply only when cargo is on board, rather than awaiting transfer to the vessel from onshore storage
tanks or following discharge to the storage site.
The HNS Fund is financed by contributions from cargo receivers to which the HNS Convention applies51.
The regime creates a general account—for bulk solids and other hazardous or noxious substances—along
with a separate oil account, an LNG account, and an LPG account. These different accounts emanate from
the unwillingness of less hazardous sectors to cross-subsidise damages from other sectors. Upon the HNS
Convention’s entry into force, the HNS’s general account will likely fund liabilities arising from CCUS
incidents.
A legal question arises regarding whether CO2 cargo shipped to storage sites should trigger the need for
storage site operators to contribute funds to the general account, particularly given CCUS projects’ nascent
stage of maturity, commercial viability, and reliance on public subsidies. CCUS participants also do not
import or trade in the same way as other entities covered under the HNS Convention. Specifically, those
participants are, at present, unlikely to sell CO2 on the market, or use CO2 to produce other goods in
material volumes. These factors may justify an exception or reduced contribution, particularly in
promoting CCUS activities for accelerating global climate change mitigation.
preceding calendar year a total quantity of at least 40 million tonnes of cargo that would be contributing to the general
account.
46
Status of the HNS Convention and 2010 Protocol. 47 More specifically, “[h]azardous and noxious substances” under Article 1(5)(a)(v) of the NHS Convention include
“liquified gases as listed in chapter 19 of the International Code for the Construction and Equipment of Ships Carrying
Liquefied Gases in Bulk”, such as liquified bulk CO2.
48 Bert Metz, Ogunlade Davidson, Heleen de Coninck, Manuela Loos, and Leo Meyer (eds), Carbon Dioxide Capture and
Storage (Cambridge: Cambridge University Press, 2006), Sections 4.3 and 4.4.4.
49 Articles 7(1), (5), and (6) of the HNS Convention.
50 Under Article 9 of the NHS Convention, the general formula limits liability for the first 2,000 units of tonnage to 10
million Special Drawing Rights. It adds 1,500 SDRs per tonne between 2,001 to 50,000 tonnes, and 360 SDRs per tonne
above 50,000 tonnes, to the liability cap.
51 Ibid, Articles 16-20 and Annex II.
42
Furthermore, CO2 is not flammable, and many experts suggest its inadvertent release at sea is not
anticipated to have the same long-term environmental effects as crude oil spills52. Marine transport of
CO2 is also likely to have a similarly strong safety record as other transportable gases. Therefore, if
contributions for CO2 are deemed necessary under the HNS Convention, it may be suitable to create a
separate account, applicable specifically to CO2.
The regime for shipped CO2 under the EU ETS
The EU ETS applies in the EU and the European Economic Area (EEA)53. It requires operators of certain
covered installations to purchase and surrender allowances—corresponding to the amount of CO2 they
produce—unless they capture and “permanently” store that CO2 for CCS and CCU purposes54.
Consequently, operators have incentives to partake in CCS and CCU activities, where the costs of capture,
transport, and injection of CO2 cost less than the price of emitting the CO2 (as determined by EU allowance
prices). However, the EU ETS’s drafters initially focused on CO2 transportation by pipeline, rather than
envisioning the possibility that the instrument might also include maritime transport of CO2 to storage
sites55.
The right to subtract captured and stored CO2
Sectors covered under Annex I of the EU ETS directive include electricity and heat generation, oil refining,
iron, steel and aluminium, paper, glass, organic chemical production, maritime transport, and aviation
within the EEA. As part of its significant “Fit for 55” legislative reforms, passed on 20 April 2023, the EU
amended this list of covered sectors to include maritime transport56.
The EU Monitoring and Reporting Regulation requires that operators measure and report both emissions
from these activities and fugitive emissions57. However, it allows operators to subtract from an
installation’s emissions any amount of CO2 produced from covered activities that is not emitted into the
52 Bert Metz, Ogunlade R Davidson, Heleen de Coninck, Manuela Loos, Leo Meyer, IPCC Special Report on Carbon
Dioxide Capture and Storage (Cambridge: Cambridge University Press, 2005), pp. 188-189.
53
What is the EU ETS?, European Commission website.
54 Parliament and Council Directive (EC) 87/2003 of 13 October 2003 establishing a scheme for greenhouse gas
emission allowance trading within the Community [2003] OJ L275/32 (“ETS Directive”). Article 12(3a) of the EU ETS
Directive stipulates that: “An obligation to surrender allowances shall not arise in respect of emissions verified as
captured and transported for permanent storage to a facility for which a permit is in force in accordance with the CCUS
Directive.” Further evidence of permanent containment includes the “conformity of the actual behaviour of the
injected CO2 with the modelled behaviour”, the “absence of any detectable leakage”, and that “the storage site is
evolving toward a situation of long-term stability”. See Article 18(2) of the Parliament and Council Directive (EC)
31/2009 of 23 April 2009 on the geological storage of carbon dioxide [2009] OJ L140/114 (“CCUS Directive”); European
Commission (DG CLIMA
), Implementation of the CCUS Directive: Guidance Document 3 (Criteria for Transfer of
Responsibility to the Competent Authority), 2011.
55 Directive (EU) 2023/959 states that “As CO2 is also expected to be transported by means other than pipelines, such
as by ship and by truck, the current coverage in Annex I to Directive 2003/87/EC for transport of greenhouse gases for
the purpose of storage should be extended to all means of transport for reasons of equal treatment and irrespective of
whether the means of transport are covered by the EU ETS”.
56 Parliament and Council Directive (EC) of 20 April 2023 amending Directive 2003/87/EC establishing a system for
greenhouse gas emission allowance trading within the Union and Decision (EU) 2015/1814 concerning the
establishment and operation of a market stability reserve for the Union greenhouse gas emission trading system.
57 Commission Regulation (EU) 2066/2018 of 19 December 2018 on the monitoring and reporting of greenhouse gas
emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council [2018] OJ L334/1
(“Monitoring Regulation”).
43
atmosphere, but is transferred — to a capture installation, transport network, or storage site within the
EU/EEA — for long-term geological storage purposes58. In this context, neither the Monitoring Regulation
nor the CO2 storage directive expressly envisage transport of CO2 by ship (although they do include
provisions relating to transport via pipelines). As a result, it is unclear whether subtraction of CO2 from
the installation’s emissions is permitted where the transfer from a covered installation is by ship. Insofar
as EU ETS liabilities could still attach to CO2 shipped and injected into a storage site—the regime may
lead to unduly restrictive outcomes.
No subtraction of CO2 from the installation’s emissions is permitted for any other type of transfer from a
covered installation. Insofar as EU ETS liabilities could still attach to CO2 shipped and injected into a
storage site—because the CO2 was not transferred exclusively through a pipeline network—the regime
would lead to unduly restrictive outcomes. As a result, the European Commission recently clarified—in
response to a request from the Norwegian Environment Agency—that transfer of captured CO2 to a ship,
and later transferred from the vessel to a pipeline transport network or directly to a storage site, does not
alter the right of CO2 producers to subtract that captured and stored CO2 from their EU ETS liabilities.
Upon transfer of the transported CO2 to the storage site, the CO2 producer can subtract that transferred
CO2 from their emissions. However, CO2 leaked during transport cannot be subtracted from the CO2
producer’s emissions59.
Therefore, in the Commission’s view, the transport of CO2 by ship within the EU/EEA is unimpeded by its
lack of explicit inclusion in the EU ETS. Yet, at present, the inclusion of CO2 transport by ship in the EU ETS
relies on this specific legal interpretation, rather than being explicit on the face of the legislation. While
highly persuasive, the Commission’s view is merely an opinion, rather than binding legal authority.
In addition, absent further legal clarity, EU/EEA CO2 emitters intending to export CO2 for storage outside
the EU/EEA are not eligible to deduct captured and stored CO2 from their EU ETS liabilities. Similarly,
despite ongoing negotiations between the EU and UK, the EU ETS is also not currently linked with the UK
ETS. This impedes both EU/EEA and UK CO2 producers—seeking to export CO2 to storage sites located in
the other jurisdiction—from subtracting the transferred CO2 from their EU ETS and UK ETS liabilities,
respectively. These are significant regulatory barriers to scaling up CO2 export activities, both within
Europe and worldwide. Legal arrangements addressing cross-border CO2 shipments between EU/EEA and
non-European governments could make CO2 producers eligible for deductions to their ETS liabilities. Such
arrangements could generate crucial financial incentives for scaling up CCS and CCU activities. It is worth
noting that the EU ETS directive includes the following provision: “When reviewing this Directive […] the
Commission shall analyse how linkages between the EU ETS and other carbon markets can be established
without impeding the achievement of the climate-neutrality objective and the Union climate targets laid
down in Regulation (EU) 2021/1119”60. This provision opens the door to a potential future linkage
between the EU and UK ETS. The possibility of such linkage and collaboration on carbon pricing is also
mentioned in the EU-UK Trade and Cooperation Agreement. In addition, ZEP has proposed that “the UK
58 Ibid, Article 49(1).
59 See Letter from the Norwegian Ministry of Climate and Environment to the European Commission, DG CLIMA, “The
Norwegian CCS Demonstration Project – Request for Legal Clarifications Related to the ETS Directive and the MR-
Regulation’ (7 July 2019). In response, see Letter from the European Commission, Directorate-General, Climate Action
to the Ambassador of Norway to the European Union” (Ref. Ares(2020)3943156 –27/07/2020), cited in Weber (2021),
p. 394. At the time of writing, the latter letter is not available online.
60
Directive amending Directive 2003/87/EC and Decision (EU) 2015/1814, 2023, EUR-Lex.
44
and the EU should agree on the definition of ‘high-quality storage of CO2' and the rules that underpin this
definition” to enable the subtraction of CO2 across both emissions trading systems61. The transport of CO2
across ETS systems will require the recognition of storage by other countries and the proof that the
captured CO2 is safely stored.
Monitoring plans and surrendering allowances: the distribution of responsibilities between operators
Assuming the Commission’s view is accurate, potential issues associated with the distribution of
responsibilities between operators under the EU ETS remain. Recent legislative amendments phase the
shipping sector into the EU ETS from 2024. The Monitoring Regulation now includes provisions to measure
and report shipping emissions. Nonetheless, there remains a question of how these amendments will
operate alongside the Commission’s position on CO2 transport by ship.
For example, the amended legislation requires shipping companies to surrender EU allowances
corresponding to greenhouse gases emitted from covered vessels on voyages and port calls within the
EU/EEA, or into or out of the EU/EEA. Under this amended legislation, shipping companies transporting
CO2 to a storage site are likely liable for transport emissions. In contrast, CO2 producers could bear liability
for any fugitive emissions caused by CO2 leakages occurring en route to the storage site.
Nevertheless, EU ETS coverage of shipping emissions will remain limited at the outset. For example, in-
scope emissions will be progressively phased in from 2024 onward, and shipping companies will not initially
be liable for emissions from smaller vessels62. Therefore, an issue arises regarding which counterparty
will be liable for emissions from uncovered emissions or below-threshold shipping activities. For example,
will CO2 producers be held liable for those residual transport emissions under the EU ETS? While that is
potentially a rational outcome, the position has not been confirmed in legislative instruments or by the
Commission.
Similarly, the legislation offers limited guidance on methods to calculate and monitor operational or
fugitive emissions occurring during specific maritime journeys to transport CO2 to storage sites. The
amended Monitoring Regulation requires shipping operators to report aggregate emissions data only at
the company level, rather than for specific journeys. Furthermore, when and under what circumstances
might title to the CO2 stream—and liability for leakages—pass to a party other than the CO2 producer?
How should CO2 leakages during transport be attributed to individual co-producers?
Absent further legislation or regulatory guidance, these regulatory gaps may give rise to methodological
ambiguities—and the possibility of multiple approaches to measurement and reporting—which could
compromise the integrity of CO2 accounting within CCUS supply chains. Ultimately, this may risk
dissuading private investment in otherwise promising CCUS projects. The process for a revision of the
Monitoring and Reporting Regulation has started in 2023 and provides an opportunity to address these
issues.
ZEP proposed changes in the context of the public consultation on the revision of the Monitoring and
Reporting Regulation to ensure an adequate inclusion of ship transport under the regulation63.
61
Need for similar rules on CO2 storage in the EU and UK ETS, 16 June 2022, Zero Emissions Platform.
62 From the introduction of shipping into the EU ETS in 2024, the ETS will only cover ships above 5,000 gross tonnes,
CO2 emissions, and 50% of emissions for voyages into and out of the EU/EEA.
63
ZEP feedback ‘EU emissions trading system (ETS) – update of the rules for monitoring and reporting emissions, 2023,
Zero Emissions Platform.
45
2. Commercial barriers and enablers to a European market for CO2 transport by ship
Developing a commercial setup for CO2 transport by ship
The UK plans to use a regulated asset base model for the transport and storage of CO2, in which users will
pay fees to use the transport and storage (T&S) network. This model would include regulated tariffs for
the use of onshore and offshore pipelines. While gas networks have monopolistic features ship transport
is expected to become a competitive activity as several companies can compete to transport CO2 from
industrial emitters to storage sites64. Regulated tariffs are therefore not recommended for the future
European market for CO2 transport by ship.
Existing financial incentives and gap in required funding
There is a gap between the cost of emitting CO2 and the cost of implementing CCS. Policies are in
development to close this through the EU ETS system and emitter subsidies and infrastructure funding
mechanisms. A successful implementation of CCS to meet Europe’s climate goals will rely on CO2
transport to grow at a sufficient scale to match at least at the same rate as capture and storage capacity,
for CO2 shipping is a critical solution for industry emitters (hubs) without access to pipelines. It is important
that CO2 shipping as a solution is developed at a sufficient scale and speed to be able to meet the climate
goals, and there is a risk that this scale is achieved too late.
The key complication for CCS solutions between emitters and stores that rely on CO2 shipping to
decarbonise is the challenge of higher costs at the emitter side compared to emitters that have access to
(existing) pipelines, due to additional investments required (liquefaction, buffer tanks, jetty) and
operational costs. For the end-to-end value chain CO2 shipping will be able to provide the advantage of
accessing lower cost store options and by providing a capacity to stabilise CCS system due to the logistics
and buffer storage optimisation. This raises the key question: what can be done to ensure the gap in
financial incentives is closed for CO2 shipping? The following levers are identified to bridge the gap in
financial investment to unlock CO2 shipping:
Fair competition for funding support available to industrial emitters that rely on CO2 shipping
It is crucial to ensure that industrial emitters that rely on CO2 shipping solutions can have a fair
competition for sufficient subsidies to decarbonise. CO2 shipping projects find it difficult to compete with
pipeline emitters for subsidy funding. If there are not enough shipping customers that have enough
incentive due to competition from pipeline emitters this will delay the forming of a CO2 shipping market
development at scale and would also result in a ‘geographically skewed’ transition, favouring sites that
happen to be near pipelines. An example is the Dutch SDE++ subsidy scheme, where there is a separate
‘Cryogenic’ category with higher subsidy amounts to cover the extra costs for emitters that rely on CO2
shipping. In case there is still uncertainty in the transport concept of the projects, flexibility for projects
to switch/fall-back to the required subsidy category would be necessary to avoid a lock-in to unviable
concepts (e.g., uncertainty as to whether pipeline options will be available or not). The Carbon Capture
& Storage Association (CCSA) published a paper in September 2023 highlighting that ship and non-
pipeline transport should be reflected in bid instructions for Track-1 and Track-2 expansion capture
64 Kahn, A.E
. The Economics of Regulation, The MIT Press, 1988.
46
bidding process65.
Allocate infrastructure funding to establish regional shipping terminal hubs
This allocation is required with sufficient pre-invested capacity of the shore/port facilities to facilitate
further expansion and regional aggregation. How can we ensure that there is an incentive to invest and
‘oversize’ the capacity of key CO2 shipping infrastructure components (terminal capacity, aggregation
capacity) for the next waves of industrial emitters to benefit from, due to increased economies of scale
and elimination of future bottlenecks?
Mechanisms for long-term certainty to underpin value streams for CO2 shipping
Long-term certainty can be supported via the following measures:
• Set high-quality carbon credit accounting standards to build integrity for CO2 transport by ship
as a trusted solution the CCS value chain.
• Consider mechanisms to provide additional support for investment in ships that are in line
with environmental and climate objectives. This includes recognising CO2 shipping as a trusted
low-carbon solution for sustainable CCS under supporting policy schemes. Recognise CO2
shipping as an enabler for BECCS and DACCS enabled as a carbon dioxide removal (CDR)
technology, to fund investments through the voluntary market and enable revenue certainty
for CO2 shipping projects through long-term carbon purchase commitments.
Support de-risking of CO2 shipping for future access to low-cost capital
It is crucial to demonstrate the project delivery, availability, and stability for the CO2 shipping solution in
the initial projects to sufficiently de-risk future investments for eligibility for bankability with access to low-
cost capital. It is recommended to have highly capable partnerships in initial phases to share risks and
have sufficient funding support as an incentive to demonstrate that it works.
Operational cost of CO2 transport by ship
Typically, normal yearly ship operational costs fall into three categories: fixed, fuel, and port fees. Fixed
costs are associated with the administration, insurance, crew, maintenance, and repair. The crew and
maintenance depend on the equipment type and size of the vessel. The port or harbour fees vary between
various regions of the world. The fee is based on the capacity of the ship. Finally, the third element is the
fuel cost which is variable and based on the size of the vessel, engine type, the type of fuel used, the cost
of the fuel and the voyage. The voyage is the function of the distance between two ports.
In addition to the normal ship operational costs, there are also significant supply chain operational costs
associated with the CO2 conditioning (purification, liquefaction), loading and temporary storage (buffer)
costs. Especially in non-normal operating conditions, these components may cause significant operational
cost overruns when not adequately controlled. The following recommendations can be made in that
regard:
65
Integrating CO2 transport by ship into the Track-2 and Track-1 expansion capture bidding process, 2023, CCSA.
47
• Port authorities should consider incentivising port/harbour fees for CO2 shipping and/or vessel
prioritisation protocols for CO2 shipping and not apply existing conventional practices.
• Standards should be developed for CO2 carriage conditions for cost-saving potential and
controlling mechanisms to avoid system disruptions: a standard (set of) CO2 compositional
specification on the control of impurities and Carriage conditions are expected to drive down
operational costs for CCS projects by achieving standard designs for the CO2 conditioning and
storage. Moreover, it is vital to have the right controlling mechanisms to avoid CO2 contamination
in CO2 ships and transport systems.
• Compensation mechanisms should be put in place for the impact of required liquid CO2 buffer
storage volumes to stabilise transport and storage systems: if there is a time-lag between
transport storage there will likely be a ‘dead-stock value’, which could result in a gap or significant
delay to be able to receive EU ETS credits.
• Fit-for-purpose onshore metering standards, including measurements. Establish standard
methodologies for CO2 metering and calibration for mass-balance quantification, avoiding
excessive requirements on ship instrumentation that will result in excessively high-costs and
operational complexity by having metering onshore (i.e., at terminal loading/unloading facilities).
• Implement innovation at the right pace: non-standard, multi-purpose and bespoke designs are
likely to increase operational costs if they are implemented too early in the operational phase of
a CO2 shipping market. At the same time, these are critical for longer-term step-changes to
innovate. It is recommended to first fully demonstrate these in the R&D phase before upscaling
these for wider implementation in the value chain.
European storage availability and need of backup system to drive down costs, national governments
willingness to take over long-term storage liability costs The International Energy Agency (IEA) stated that “with growing plans to equip facilities with CO2 capture,
spurred by strengthened climate goals, a gap is starting to emerge between anticipated demand for CO2
storage and the pace of development of storage facilities”66.
To enable a CO2 shipping market at scale it will be critical that storage developments that have or are
linked to receiving terminal scope pick up pace. In addition, CO2 shipping can support CCS hubs with more
flexibility in volume streams due to liquid CO2 buffer storage capacities at either end of the shipping route
increasing the overall stability and availability of the system. CO2 shipping can also enable destination
optionality between a set of stores in case of storage disruptions, outages, or deviations from projected
injectivity (both downside and upside).
Sufficient CO2 shipping volumes in the CCS ecosystem will provide terminal buffering capacity of liquid
CO2 volumes and can enable high availability in storage systems. Especially for depleted field injection, it
is critical to keep the system stable in initial phases and prevent disruptions in the injection operations
66 Website of the International Energy Agency; Energy system, Carbon Capture, Utilisation and Storage
; CO2 Transport
and Storage.
48
and in the transport part of the value chain. The following statements can be made in that regard:
• Hub setups with competent operators are key, incentivised to drive performance; and
• Liquid CO2 buffering capacity as part of the receiving terminals for CO2 shipping can play a
critical role to stabilize CCS hub system fluctuations, through management of the tank levels.
It is critical that sufficient CO2 shipping volumes are part of the buffering capacity to enable
higher availabilities.
The development of excess storage capacity should be accelerated with a receiving terminal link by
enhancing the risk/reward balance and upside potential for storage investors to accelerate timely
storage investments.
• When investment returns are commensurate with the associated subsurface and
operational project risks to the investors, this will result in increased levels and speed of
storage investments.
• Lack of upside for investors in the system, causes stringent agreements on send-or-pay
for investors to manage risk. If more upside sharing is allowed, risk/reward considering
increasing CO2 prices can be further shared across different players in the value chain
providing an incentive to accelerated storage and transport development investments.
It is unlikely that there will be investment in excess storage capacity, e.g., for backup
capacity or to facilitate flexibility combined with CO2 shipping – if there is no clear
upside unless supply/demand can be priced (e.g., ETS CO2 price linkage in tariff).
A competitive CO2 market via open access
A competitive CO2 market will need to accommodate several different shipping business models, for
instance:
• A ‘pick-up’ service by the storage provider;
• A ‘drop-off’ model where the emitters provide its own shipping, and
• An independent shipper model, where the shipper acts as an intermediary between emitter and
the store.
A market that encourages competition and incentivises the aggregation of additional (international)
users is expected to lower the overall cost of CO2 shipping. Such a market would require the possibility
to ship CO2 from various emitter sources through aggregation hubs. In the establishment of a
competitive open-access CO2 market, barriers are likely to emerge in the form of compatibility issues
between multiple sources and destinations and the high levels of operational and commercial
complexity due to operations and agreements between emitters, shippers, terminals/transport
networks, and storage providers. The following recommendations are offered to be considered to allow
formation of a successful open- access CO2 shipping market:
• Standardisation of ship-shore interface (e.g., loading arms, interfacing connections) by the
appropriate shipping organisation (SIGTTO), to enable compatibility, destination optionality and
ultimately increase market competition;
49
• Standardisation of CO2 specifications for shipping, liquefaction, and onshore storage to ensure
compatibility and consistency between CCS projects to be achieved through Joint Industry
Projects dedicated to the subject followed by establishing a working group and publications by
ISO;
• Acceleration of a cross-border CO2 shipping transportation regulatory framework that covers
the UK, the EU, and the EEA. This can be achieved via ratification/acceptance of the Article 6
amendment to the London Protocol, country-to-country agreements, and by mutual
recognition and mechanisms for credits and liability transfer between the EU and UK ETS
systems;
• An adequate business environment enabling multiple international CO2 shipping providers to
invest and offer services on a competitive basis. This will give CO2 shipping providers the
incentive to carry the risk they are best place to manage, improve operational performance,
and perform portfolio optimisation activities, resulting in a reduction of overall costs;
• Port constraints and prioritisation – LCO2 shipping results in increase frequency whereby port
authorities may give preference to other business (e.g., hydrogen or ammonia); and
• Extremely good safety and environmental footprint performance in early phases of CCS and
CO2 shipping to deserve License to Operate. Lower risk / more proven concepts should
potentially be prioritised over higher risks/novel concepts, unless there is a high degree of
assurance. The environmental footprint of shipping itself (NOx, CO2 emissions, etc.) should
also be minimised.
A commercial framework should be considered to manage the operational complexity introduced by
parallel business models, especially where the emitter is in charge of its own shipping or it is provided
through an independent/intermediary shipper. The following recommendations can be made in that
regard:
• Frameworks for the different models on how open access is ensured and where
responsibilities lie throughout the shipping and transport and storage value chain for liabilities,
title and risks, and how due diligence and ‘duty of care’ assessments are carried out.
• Standard terms and conditions for operational planning and disputes on how to use a network
and how to deal with deviations, including multiple measurement/transfer points and
allocation standards. For instance, when there are logistics issues at the receiving terminal,
sending terminal, during shipping, or a combination – who compensates whom in case of
unavailability of the end-to-end system? How to address the impact on other shippers and
how to resolve disputes in case of unclear circumstances? What happens if there is a
loss/mismanagement?
Public funding
Whilst the UK CCS target for 2030 remains within reach, the inclusion in CO2 transport via road, rail and ship
50
for currently operating plants is essential to achieve the goal. The recent announcements under the UK cluster
sequencing competition, for example, the East Coast Cluster in the Teesside, UK, demonstrates the UK
government ambition to fund large scale new build blue hydrogen (i.e. with carbon capture) and zero emission
power plants (with carbon capture), and in parallel fund the development carbon capture networks within
industrial clusters, but does not demonstrate a significant investment or interest in the reduction of CO2
emissions from existing operating emitters.
The funding competitions and business models do not provide the clarity needed for existing emitters to
continue the efforts and costs of designing a carbon capture project, without the opportunity to connect to
the developing CO2 gathering networks. The funding competitions for carbon capture networks in the UK do
not provide an opportunity to ‘aggregate’ CO2 and co-mingle with various sources of CO2 to improve the
condition (pressure, temperature and impurity) and/or the technical/commercial attraction of the project.
The lack of ability to continue a design or concept based on aggregating CO2 to achieve scale and reduce unit
cost of sequestration will pause the development of multiple carbon capture projects.
The carbon capture networks and clusters illustrate a significant increase in yearly storage capacity after 2030,
but the delay from now until 2030 will no doubt result in the closure of facilities that could have continued to
operate with the benefit of a carbon capture project in development. As the European market continues to
reposition the energy infrastructure assets, including refineries, gas plants and import and export terminals,
judgements will be made on the future of the assets linked to the viability of a connection to a CO2 storage
location, or the ability to transport the CO2 to a terminal for onwards shipping. The ability of an existing energy
infrastructure asset to connect to a carbon capture store, either directly or indirectly, ensures the future
interest to invest and operate the facilities long into the 2030s.
Timeline
The scale of the currently anticipated CCS projects presents a potential for delay during design, planning,
and construction, with the cost of materials and labour playing a significant role in capital projects delay
and cost overrun in recent times, coupled with the cost of energy and raw materials feeding into the
production costs of construction materials.
Opportunity for existing/inland emitters
A review of existing operating emitting sites, and a detailed analysis of the ‘deliverability’ of carbon capture
and transport will result in an opportunity list, detailed by market segment that will show the potential volume
of CO2 that can be captured and stored before the end of the decade. The deliverability criteria should assess
the distance from the store or CO2 shipping terminal, the volume of CO2, the impurity level, and transport
mode i.e., inland waterway, rail, road, or pipeline. Part of the challenge in assessing the opportunity for carbon
capture across the sectors, for example energy-from-waste or the construction materials industries, is the
lack of knowledge or funding available to provide an investment case and business model for carbon capture.
In many cases, the cost of the concept study is prohibitive, and the operating company will not have the
speculative funding available to assess the opportunity for carbon capture.
Regulation
51
The local planning and permitting environment is essential for the success of large scale CO2 terminal
infrastructure to enable the shipping of CO2. Existing import and export locations are likely to be fully
occupied, given the long-term nature of the supply chains for chemicals and fuels, along with the lack of
physical space to develop additional storage, even for existing customers. Future terminal development
will consist of years of planning and permitting, before construction, which will include seasonal
environment and wildlife assessments.
The local and national planning regime must ensure the national infrastructure regulations and support
mechanism can be flexible to assist in the planning consents for large scale CO2 terminal development, to
prevent a lengthy delay and objections. The proactive planning approach will also need to consider the
potential impact to the safety permitting for large scale storage of CO2, which is not currently included in
normal terminal operations. This could add complexity and add delay to the planning process.
Commercial arrangements
The traditional import and export terminal business would usually recover design and construction costs
within a long term (15 to 20 years) commercial arrangements, where estimates for yearly volumes and
additional throughput charges are included in the agreements. For the existing chemicals and fuels
storage and handling, the supporting infrastructure i.e., rail and road transport assets, pipelines, pumps,
and storage vessels are already well established and, in many cases, transferable between materials,
reducing the risk and cost to enable new customers and markets to develop.
The CO2 market requires new build storage and handling infrastructure and the supporting network
infrastructure i.e., vessels or train carriages, particularly at scale, to enable the transport and storage of
CO2, resulting in a need for the funding framework to have flexibility in the model to compensate for
emitters with a range of investments cases, i.e. some emitters will have relatively low-cost liquefaction
and transport costs versus some emitters who will need enhance carbon capture technology for
impurities, and the need to transport CO2 a greater distance. For example, the current model for the
cluster sequencing competition suggests a connection to the broader carbon capture and storage
network at the physical boundary of the emitter i.e., the fence line, this is not a practical if the emitter is
at a prohibitive distance from the cluster.
Managing cross-chain risks (liquefaction, shipping, storage)
Many companies are now operating in a rapidly evolving new market, and in many cases with new
technology, and new green field development locations, compounding the projects back-to-back risk. The
addition of ‘buffer’ storage and handling at the sending and receiving locations in the system requires
designing and including in the end-to-end system design, from emitter to store, via a CO2 shipping
terminal. In many cases, the ‘buffer’ storage is expected to be 7-10 days of production or loading/transfer
rates of CO2 between storage and transport mode, to provide flexibility to producing emitter plant and
the shipping sending or receiving terminal.
In some sectors, there is a co-location benefit, for example, in proximity clusters, the ability to scale and
source CO2 from a range of emitters can result in a scale benefit as smaller emitters can transport CO2. The
requirement to gather CO2 in a central location, at a technical and economically way is an opportunity to
extend the reach of the first phase of carbon capture clusters, by enabling the economical capture and
52
transport of CO2 from inland emitters such as energy from waste plants, cement, and steel industries.
The gathering of CO2 from inland locations and transporting to a coast via road, rail or vessel for
reinjection is not currently clearly supported in the funding opportunities. The complexity with each case
i.e., the distance between the emitter and the store, the volume of CO2 per year to be transported, and the
technology required for each sector of the market create funding requirements to remove the back-to-
back risk of developing a project linked to a cluster development and prevent a domino effect of one
project delaying the multi model – multi-directional transport of CO2. The current funding mechanism
only considers one directional CO2 storage from the emitter, directly to the permanent store.
The potential to develop a merchant CO2 shipping business is present but requires flexibility in the funding
and policy to allow European (UK to Europe and vice versa) movement of CO2 for sequestration and use.
Stranded asset risk for first generation ship and terminal designs and finite contract duration of first
projects/customers
There is significant stranded asset risk. An opportunity to lower the risk is to allow aggregation in the form
of a CO2 transport and storage hub, ideally co-located with access to a developing large-scale store,
reducing the project risk and financial investment risk. The scale also needs to be large enough to reduce
the cost of carbon and the cost of developing the storage and jetty infrastructure. Co-locating in an
existing terminal location or European shipping hub would allow for de-risking by using the jetty and
terminal infrastructure for other products, and de risking the permitting process.
53
54
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