From Emitter to Storage Site: The Legal Pathways of CO₂ Transport

The Pipeline as the Legislator's Preferred Model

Despite the pivotal role transport plays, the KSpTG addresses it only from a narrow angle: the Act deals exclusively with pipeline-based transport. Building such pipelines is a large-scale infrastructure undertaking. Projects typically cross several municipalities, often entire Länder, and touch on a wide range of public and private interests. The approval procedure is correspondingly demanding. CO₂ pipelines are subject to a plan approval procedure (Planfeststellungsverfahren), which consolidates every affected area of law into a single administrative decision. This involves extensive public and agency participation, with any disputed issues addressed at a public discussion hearing (Erörterungstermin). At the end of the process, the plan approval authority must not only assess whether the project complies with applicable law but also carry out a comprehensive balancing of interests. Here, the legislator has set a clear course: the construction, operation and modification of CO₂ pipelines are deemed to be of overriding public interest, since they serve climate protection and contribute to the permanent reduction of CO₂ emissions. This is intended to help resolve conflicts in favour of CCS infrastructure. Where a pipeline is laid in parallel with hydrogen pipelines, it is further presumed that the CO₂ pipeline does not cause any additional significant adverse effects.

That said, a plan approval procedure remains a complex process that can take years to complete. To limit delays, the Act refers to acceleration mechanisms drawn from energy law, including shortened deadlines, the option of dispensing with the discussion hearing, and the removal of suspensive effect from third-party legal remedies against the plan approval decision.

Repurposing Existing Pipelines

The KSpTG also provides for the possibility of repurposing existing pipelines. Here, the Act makes life comparatively easy for project developers: existing gas, hydrogen or product pipelines may generally also be used for CO₂ transport without triggering a new approval procedure. A notification to the competent authority, accompanied by an expert opinion confirming technical safety, is intended to suffice.

Whether pipelines can actually be repurposed in practice is therefore likely to depend less on legal than on technical parameters: can the pipelines, for instance, withstand the transport of carbon dioxide in its so-called supercritical state? And if not, would transport in gaseous form still be economically attractive?

Alternatives to the Pipeline

The pipeline network still needs to be built, and its primary routing is expected to follow major emitters whose CO₂ emissions are difficult or impossible to avoid. For smaller emitters located outside the industrial centres in particular, a direct connection to a CO₂ pipeline network is often not on the horizon. Even so, these companies also need to capture and transport unavoidable CO₂. Where no pipeline connection is available, one option is to process, liquefy and temporarily store the captured carbon dioxide on site at the plant. From there, transport by rail, ship or road to a coastal landing terminal is conceivable. From the terminal, the carbon dioxide is transported onward to the storage site, either via offshore pipelines or by ship. Based on the current state of knowledge, hopes for fully multimodal transport – under which CO₂ could be freely transferred between tanks and pipelines in either direction – are likely to run up against the differing pressure and temperature requirements for carbon dioxide. Unlike pipeline-based transport, most of the infrastructure needed for transport by rail, road and water already exists. Even in this scenario, however, additional facilities are required, in particular for compressing, liquefying and temporarily storing the carbon dioxide.

Permit Requirements

Unlike CO₂ pipelines, these facilities are generally not subject to a plan approval procedure under the KSpTG. That does not mean, however, that they can be built and operated free of any permitting requirement. Instead, the question is whether a building permit alone suffices, or whether a permit under the Federal Immission Control Act (Bundes-Immissionsschutzgesetz – BImSchG) is also required. An explicit permit requirement applies, first of all, to standalone carbon capture facilities that capture CO₂ streams for the purpose of permanent geological storage from an installation falling within the scope of the Industrial Emissions Directive (IED). Where capture technology is integrated into an existing installation, a permit for a modification under the Federal Immission Control Act may be required instead. Beyond that, the Act also imposes permitting requirements for storage once certain storage capacities are exceeded.

This, however, does not capture all the facilities needed for transport. A permit requirement may also arise where compression plants, liquefaction plants or intermediate storage facilities qualify as ancillary installations of an installation that is already subject to permitting. This is because the permitting requirement for an installation also extends to ancillary installations that are spatially and operationally connected with the installation's components and process stages and that may be relevant to the occurrence or avoidance of environmental impacts. Whether this is the case for facilities preparing carbon dioxide for transport cannot be answered categorically. While there is regularly a close technical connection between capture, compression, liquefaction and intermediate storage, these facilities frequently no longer serve the operation of the actual industrial installation or the capture process itself. Whether a compressor or an intermediate storage facility still qualifies as an ancillary installation of the main plant, or already constitutes a standalone installation, will therefore often require a case-by-case assessment.

Many transport concepts will also require landing terminals, where the various transport streams converge and are consolidated for onward transport to the storage site. Given the storage capacities required at such terminals, permitting requirements under the German Immission Control Act will regularly need closer examination. Onward transport to the storage site can take place via offshore pipelines, which are subject to the KSpTG's special approval regime. As a result, the technical facilities required for this purpose can be included in the plan approval procedure itself. Direct transport by ship to the offshore storage site is, however, equally conceivable.

Emissions Trading: No Disadvantage for Alternative Transport Routes

Whether carbon dioxide can be transported to the storage site via alternative transport routes is not only a question of permitting law. For emitters and operators of capture installations, it is equally decisive whether, and when, captured quantities can be credited for EU Emissions Trading System (ETS) purposes. The original ETS rules were initially heavily tailored to pipeline transport: captured carbon dioxide was generally treated as "transferred" – and therefore no longer had to be accounted for as an emission by the original emitter – only where it was fed into a pipeline for the purpose of geological storage. Other transport routes could, as a rule, only be taken into account for ETS purposes once the carbon dioxide had actually reached the storage site. In the meantime, however, EU emissions trading law has moved towards a considerably broader approach. The Monitoring and Reporting Regulation (MRR) now attaches to the concept of CO₂ transport infrastructure as such. This covers not only pipelines but also transport by ship, rail and road, together with the liquefaction and intermediate storage facilities required for that purpose. For operators, this means greater legal certainty: alternative transport routes are now not only technically and administratively conceivable, but are also recognised under emissions trading law.

European Ambition, National Shortfalls

The Net Zero Industry Act (NZIA) sets the binding EU target of achieving an annual CO₂ injection capacity of 50 million tonnes across the European Union by 2030. It also designates every step of the CCS value chain as a net-zero technology, entitled to benefit from accelerated permitting procedures. At the same time, at least in Germany, development of the carbon dioxide infrastructure has yet to materialise.

The main culprit is the lack of a viable business case. Building this infrastructure costs money, and a range of interdependencies compound the problem: It is economically unattractive to build a storage site if no one is investing in transport. At the same time, final investment decisions on capture technologies are held back as long as the transport and storage infrastructure is still not in sight and therefore neither the specifications nor the price per tonne of captured CO₂ are known. This dilemma has occupied the industry for years.

Attempts to resolve this dilemma and to get a robust business case off the ground have either not been made or have not succeeded. The Net Zero Industry Act already obliges the oil and gas industry to create injection capacity – a requirement that will still have to withstand scrutiny by the European courts. In Germany, however, even a willing operator could hardly comply with that obligation, since CO₂ storage is only permitted within the already heavily used EEZ. The use of onshore CCS remains a matter for the individual Länder, which for their part have yet to bring themselves to allow it.

For many emitters, moreover, the numbers still do not add up in favour of capture and storage, since emission allowances remain cheaper than a tonne of stored CO₂. This is particularly true as long as no pipeline network exists that could meaningfully reduce transport costs. Given the current economic climate and the now considerable regulatory burden in both Germany and the European Union, it is hardly surprising that investment in CCS infrastructure fails to materialise without a robust business case.

What is needed, then, are cost-efficient solutions rather than idealistic policy goals. Above all, this means three things: enabling the use of existing infrastructure for onshore storage; introducing acceleration mechanisms for those facilities that are not yet covered by the KSpTG but are nonetheless essential to the CCS value chain; and staffing up the competent authorities sufficiently to handle these extensive permitting and planning procedures with the necessary speed and quality.