International Transport of Captured <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$\hbox {CO}_2$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <msub> <mtext>CO</mtext> <mn>2</mn> </msub> </math> </EquationSource> </InlineEquation>: Who Can Gain and How Much?

If carbon capture and storage (CCS) is to become a viable option for low-carbon power generation, its deployment will require the construction of dedicated CO<Subscript>2</Subscript> transport infrastructure. In a scenario of large-scale deployment of CCS in Europe by 2050, the optimal (cost-minimising) CO<Subscript>2</Subscript> transport network would consist of large international bulk pipelines from the main CO<Subscript>2</Subscript> source regions to the CO<Subscript>2</Subscript> sinks in hydrocarbon fields and saline aquifers, which are mostly located in the North Sea. In this paper, we use a Shapley value approach to analyse the multilateral negotiation process that would be required to develop such jointly optimised CO<Subscript>2</Subscript> infrastructure. First, we find that countries with excess storage capacity capture 38–45 % of the benefits of multilateral coordination, implying that the resource rent of a depleted hydrocarbon field (when used for CO<Subscript>2</Subscript> storage) is roughly <InlineEquation ID="IEq4"> <EquationSource Format="TEX">$${\$}1$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mrow> <mi mathvariant="normal">$</mi> <mn>1</mn> </mrow> </math> </EquationSource> </InlineEquation> per barrel of original recoverable oil reserves, or <InlineEquation ID="IEq5"> <EquationSource Format="TEX">$${\$}2$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mrow> <mi mathvariant="normal">$</mi> <mn>2</mn> </mrow> </math> </EquationSource> </InlineEquation> per boe (barrel of oil equivalent) of original recoverable gas reserves. This adds 25–600 % to current estimates of CO<Subscript>2</Subscript> storage cost. Second, countries with a strategic transit location capture 19 % of the rent in the case of national pipeline monopolies. Liberalisation of CO<Subscript>2</Subscript> pipeline construction at EU level could eliminate the transit rent and is shown to reduce by two-thirds the differences between countries in terms of cost per tonne of CO<Subscript>2</Subscript> exported. Reaching agreement on such liberalisation may be politically challenging, since the payoffs are shown to be strongly divergent across countries. Copyright The Author(s) 2014