# Cost allocation for European CCS projects

David Lowing, Adrien Nicolle

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David Lowing, Adrien Nicolle. Cost allocation for European CCS projects. 2025. hal-05296232v2

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# Cost allocation for European CCS projects

David Lowing^a, Adrien Nicolle^b,*

^aEcole Normale Supérieure de Rennes, CNRS UMR 6211 CREM, 11 avenue Robert Schuman, 35170, Bruz, France

^bFlorence School of Regulation, Robert Schuman Center for Advanced Studies, European University Institute, Via G. Boccaccio 121, 50133, Florence, Italy

## Abstract

To advance the deployment of carbon capture and storage (CCS), the European Union supports cross-border infrastructure through Projects of Common Interest (PCIs). While such projects generate benefits across countries, they also create uneven financial burdens for the participating Member States. This paper examines the fair allocation of these costs among the beneficiaries. We introduce and axiomatically characterize three cost-allocation solutions, each reflecting a distinct distributive principle. Then, we apply these solutions to a case study involving Belgium, France, the Netherlands, and Germany, drawing insights for the design of European CCS policy. Our paper contributes to ongoing policy debates on the design of cross-border cost allocation frameworks for PCIs.

**Keywords:** Carbon Capture and Storage, Projects of Common Interest, Cost allocation problem, Axiomatic method.

**JEL:** C71, Q56, H77

<footnote>*Corresponding author</footnote>

<footnote>Email addresses: david.lowing@ens-rennes.fr (David Lowing), adrien.nicolle@eui.eu (Adrien Nicolle)</footnote>
# 1. Introduction

Mitigating climate change is a core priority of the European Commission (European Commission, 2024b). Among the various tools available for decarbonization, **carbon capture and storage** (CCS) plays a key role in mitigation scenarios (IPCC, 2022). The technology, which involves capturing CO₂ emissions at the source and transporting them for permanent storage in deep geological formations, is gaining momentum across the European Union (EU), with multiple member states considering it as part of their national decarbonization strategy (Nicolle et al., 2024). However, the EU faces a challenge in terms of storage capacity: there is currently **no large-scale operational CO₂ storage site** within EU territory (IEA, 2024), and planned projects are primarily concentrated in a few countries (Clean Air Task Force, 2024). Given the long lead times for developing storage, several member states will likely lack domestic capacity in the short term, making cross-border solutions essential to meeting EU climate objectives.

To address these cross-border dependencies, the EU established **Projects of Common Interest** (PCIs), which are cross-border infrastructure projects that contribute to EU energy and climate goals (European Commission, 2013). For CCS, 14 projects have been listed as PCIs in the latest round (European Commission, 2023). These cross-border projects raise the question on **how cost should be allocated**, especially given the sharp asymmetries between host and user countries. Indeed, a few countries will likely host most of the transport and storage infrastructure, while others will probably rely primarily on access. Without cost-allocation, host countries may face disproportionate investment burdens, or conversely, might leverage other countries' dependency to reduce their share of costs. This underscores the need to develop transparent and principled cost allocation rules that go beyond the general provisions of the revised Trans-European Networks for Energy regulation (European Commission, 2022).

Despite the growing strategic importance of CCS infrastructure in the EU, cost allocation among member states has received little academic attention. Existing studies on CCS cost-sharing generally operate at the user level rather than between countries. Massol et al. (2015) and Massol et al. (2018) analyze coalition formation in CCS networks under regulated tariffs, while van Beek et al. (2024) examines direct cost allocation among industrial emitters. These approaches focus on the recovery of infrastructure costs within countries, once national shares are determined, but do not address the initial cross-border redistribution of costs.

To address this gap, we conduct an **ex-post analysis of cost allocation** in a setting where countries are already engaged in PCIs and incur heterogeneous costs associated with CCS. Our
aim is to formalize cost allocation solutions through a transparent, axiomatic approach. Following
recommendations in previous literature (Meeus, 2023; ACER, 2023), we consider cost allocation on
a set of projects rather than individual ones. Because countries may participate in multiple PCIs,
we model the system as a hypergraph, where each PCI connects all involved member states.

The first solution, which we term the **Egalitarian** solution, divides the costs borne by each
country equally among itself and its PCI partners. This approach reflects the intuition that partner
countries share partial responsibility for one another's costs, and thus it is reasonable that they
contribute to alleviating them through monetary transfers. The second, the **Common Projects**
solution, refines this approach by accounting for the structure of the PCI network. Specifically,
it allocates each country's costs proportionally among its partners according to the number of
PCIs they have in common, providing a more nuanced reflection of the interconnections within
the network. The third, the **Two-step Egalitarian** solution, combines features of both previous
solutions. It first allocates a country's costs equally across the PCIs in which it participates and
then divides the cost of each PCI equally among its member states.<fnref n="1" />

We provide **axiomatic characterizations** of our solutions. All of them satisfy the axioms
of efficiency and independence of irrelevant projects. Efficiency means that the allocated costs
equal the total cost faced by the participating countries. Independence (of irrelevant projects)
means that a country's allocation depends only on the PCIs in which it participates. If a solution
additionally satisfies the symmetry, then it coincides with the Egalitarian solution. This axiom
means that two countries are equally responsible for the costs of any shared partner. Replacing
symmetry and independence with a proportionality axiom yields the Common Project solution,
with proportionality meaning that responsibility increases with the number of shared PCIs. Lastly,
we characterize the Two-Step Egalitarian solution by efficiency and independence combined with
two alternatives to symmetry: (i) any two PCIs share equal responsibility for the costs of a country
they jointly connect, and (ii) within each PCI, members share responsibility equally for the costs
of their peers.

We then apply these solutions to a **European CCS investment case** involving Belgium,
France, the Netherlands, and Germany, four member states currently at the forefront of CCS
deployment. In this case study, all solutions assign Belgium a cost share nearly four times its

<footnote n="1">¹Note that all of these solutions ensure that PCI participants must contribute to the costs borne by their partners. In this way, our solutions remain consistent with the beneficiary-pays principle.</footnote>
initial expenditures. We argue that the Two-Step Egalitarian solution offers the most suitable basis
for allocating costs, given the early stage of CCS deployment in Europe.

We proceed as follows: in Section 2, we develop our theoretical model, characterize each solution
axiomatically, and provide examples; in Section 3, we apply our solutions to a practical European
CCS investment case study and then discuss our contribution to current policy debates and future
research paths; Section 4 concludes. The proofs of our characterization results, and the technical
details of the case study, are relegated to Appendix A and Appendix B, respectively.

## 2. Theoretical contribution

This section is organized into four subsections. The first subsection introduces our cost-allocation
model, while the remaining three focus on the definition and axiomatic characterization of the
Egalitarian, Common Projects, and Two-step Egalitarian solutions, respectively.

### 2.1. A model of cost allocation

Let us consider a finite and fixed set of countries $N = \{1, \dots, n\}$. Countries are involved into
(cross-border) Project of Common Interests (PCIs) represented by an hypergraph $(N, \mathcal{E})$ where $N$
plays the role of vertex set and $\mathcal{E} \subseteq 2^N$ are the edges representing the different PCIs. We assume
that each PCI involves at least two countries, i.e., that each $E \in \mathcal{E}$ verifies $|E| \ge 2$, and that each
country participates in at least one PCI, i.e., that for each $i \in N$, there exists at least one $E \in \mathcal{E}$
such that $i \in E$. Denote by $\mathcal{E}(i) = \{E \in \mathcal{E} : i \in E\}$ the set of all PCIs in which $i \in N$ is involved.
The partners of $i \in N$, given by $P(i) = (\cup_{E \in \mathcal{E}(i)} E)$, corresponds to the set of countries that formed
at least one PCI with $i$. By convention, we set $i \in P(i)$. For any two $i, j \in N$, let $\mathcal{E}(ij) = \mathcal{E}(i) \cap \mathcal{E}(j)$
be the set of PCIs which are common to $i$ and $j$.

Each country $i \in N$ supports a cost $c_i \ge 0$ corresponding to their CCS-related expenditures.
We denote the vector of costs by $c \in \mathbb{R}_+^n$. Partners of countries incurring non-zero costs may be
entitled to compensate them, as they also benefit from participating in the same PCI. Our objective
is thus to divide the total cost $||c|| = \sum_{i \in N} c_i$ among the countries by accounting for the different
PCIs they may belong to. A cost-allocation problem, or a problem for short, is a tuple $(N, c, \mathcal{E})$.
For clarity, we simply denote a problem by $(c, \mathcal{E})$ since $N$ is fixed. The class of all problems on $N$
is denoted by $\mathbb{P}^N$.

A cost-allocation vector $x \in \mathbb{R}_+^n$ is a vector whose coordinates specify a certain cost-share per
country. A solution on $\mathbb{P}^N$ is a map $f: \mathbb{P}^N \to \mathbb{R}_+^n$ that assigns, to each problem $(c, \mathcal{E}) \in \mathbb{P}^N$, a cost-
allocation vector $f(c, \mathcal{E})$. In this paper, we propose three solutions to our problem. Each solution is grounded in different principles, which are reflected in their respective axiomatic characterizations.<fnref n="2" />

## 2.2. The Egalitarian solution

The first solution we discuss is called the Egalitarian solution (EGS). As all the solutions introduced in this paper, the Egalitarian solution advocates that if a country $i$ is part of a PCI with another country $j$, then $i$ should undertake a share of the cost $c_j$. The Egalitarian solution, in particular, ensures that the cost $c_j$ of any country $j \in N$ should be equally divided among its partners in $P(j)$. Equivalently, this means that if $i$ is a partner of $j$, then $i$ should undertake the same share of $c_j$ than any other partner of $j$.<fnref n="3" />

**Definition 1.** The Egalitarian solution EGS is defined, for each $(c, \mathcal{E}) \in \mathbb{P}^N$ as

$$ \forall i \in N, \quad EGS_i(c, \mathcal{E}) = \sum_{j \in P(i)} \frac{1}{|P(j)|} c_j. $$

**Example 1.** Consider an economy with three neighboring countries, $N = 1, 2, 3$, incurring costs given by $c = (4, 6, 8)$. These countries have formed PCIs, represented by $(N, \mathcal{E})$, where $\mathcal{E} = \{\{1, 2\}, \{2, 3\}, \{2, 3\}\}$. In this setting, country 1 has entered a PCI with country 2, while countries 2 and 3 participate in two distinct PCIs together (see Figure 1).

To compute the Egalitarian solution, proceed as follows. Take any country $i$ with cost $c_i$. The rule prescribes that $c_i$ should be divided equally among $i$ and all of its PCI partners. For example, country 1 bears a cost of $c_1 = 4$. Since its partners are $P(1) = \{1, 2\}$, this cost is divided equally between the two, assigning $c_1/2$ to each. Repeating the procedure, we find that $c_2$ is divided equally among countries 1, 2, and 3, while $c_3$ is split between countries 2 and 3. Collecting these allocations yields $EGS(c, \mathcal{E}) = (c_1/2 + c_2/3, c_1/2 + c_2/3 + c_3/2, c_2/3 + c_3/2) = (4, 8, 6)$.

<footnote n="2">²The model presented in this paper is mostly grounded in cooperative game theory. Additional studies on CCS economics, grounded in different microeconomic theories, include Bertinelli et al. (2014) and Cai and Singham (2018).</footnote>

<footnote n="3">³In the special case where all PCIs involve exactly two countries, the Egalitarian solution coincides with the so-called Polluter pays-allocation rule introduced by Béal et al. (2024) for non-point source pollution problems.</footnote>
<figure><img src="image_2.png" /><figcaption>Figure 1: Example of a cost-allocation problem</figcaption></figure>

We characterize the solution by means of three axioms. The first, Pareto Efficiency (or simply Efficiency), is a common property of all the solutions proposed in this paper. It requires that the sum of the countries’ allocations should exactly cover the total cost $||c||$. In other words, there is no loss or gain incurred by the cost-allocation process.

**Efficiency (E):** For any $(c, \mathcal{E}) \in \mathbb{P}^N$, $\sum_{i \in N} f_i(c, \mathcal{E}) = ||c||$.

Due to changes in investment decisions or uncertainties in expenditures associated with CCS, the costs borne by a given country may fluctuate. When such variations arise, a fair cost-allocation solution should distribute them appropriately among that country’s partners. At the same time, it is crucial to ensure that countries which have not established a PCI with the affected country remain insulated from such fluctuations, since they do not benefit from the corresponding investments. The following axiom formalizes this principle: if a country $i$ has not formed any PCI with another country $k$, then any variations in the cost $c_k$ should not affect the cost share of $i$.<fnref n="4" />

**Independence of irrelevant projects (IIP):** For any two $(c, \mathcal{E})$, $(c', \mathcal{E}) \in \mathbb{P}^N$ such that $c'_k \ge c_k$ for some $k \in N$ and $c'_h = c_h$ for any $h \ne k$,

$$ \forall i \notin P(k), \quad f_i(c', \mathcal{E}) = f_i(c, \mathcal{E}). $$

The third axiom builds on the same thought experiment. It states that any change in a country’s costs must be divided equally among all its partners—regardless of the number of contracts each partner holds. In other words, cost variations should be distributed uniformly, ensuring that every

<footnote n="4">⁴Independence of irrelevant projects (IIP) aligns with the numerous *independence of irrelevant alternatives* type properties found in the social choice or game theory literature (see, for instance, Ray, 1973; Roth et al., 1977; Moulin, 1991; Peters and Wakker, 1991)</footnote>
partner carries the same share of the burden. It treats all the partners of a given country as equals, regardless of their differences in terms of costs or the number of common PCIs.

**Symmetry (S):** For any two $(c, \mathcal{E})$, $(c', \mathcal{E}) \in \mathbb{P}^N$ such that $c'_k \ge c_k$ for some $k \in N$ and $c'_h = c_h$ for any $h \ne k$,

$$ \forall i, j \in P(k), \quad f_i(c', \mathcal{E}) - f_i(c, \mathcal{E}) = f_j(c', \mathcal{E}) - f_j(c, \mathcal{E}). $$

We have the material to establish our first axiomatic characterization. The result states that the Egalitarian solution is the only solution satisfying the three axioms we presented.

**Theorem 1.** A solution $f$ on $\mathbb{P}^N$ satisfies Efficiency (E), Independence of irrelevant projects (IIP), and Symmetry (S) if and only if it is the Egalitarian solution EGS.

### 2.3. The Common Projects solution

Consider the case where a country $i$ shares multiple PCIs with another country $j$ (say, two), while another country $i'$ shares only one PCI with $j$. Assigning the same portion of $c_j$ to both $i$ and $i'$, as the Egalitarian solution does, may not be equitable, since $i$ arguably derives greater benefits from its broader collaboration with $j$. Our second solution, the Common Projects solution (CPS), avoids an equal split of each country's cost among its partners. Instead, it allocates costs in proportion to the number of PCIs they share, thereby better reflecting the relative intensity of cooperation.<fnref n="5" />

**Definition 2.** The Common Projects solution CPS is defined, for each $(c, \mathcal{E}) \in \mathbb{P}^N$ as

$$ \forall i \in N, \quad \mathrm{CPS}_i(c, \mathcal{E}) = \sum_{j \in P(i)} \frac{|\mathcal{E}(ij)|}{\sum_{k \in N} |\mathcal{E}(kj)|} \times c_j. $$

**Example 2.** Consider again Example 1. To compute the Common Projects solution, proceed country by country as follows. Take country 2, which incurs a cost of $c_2 = 6$. This cost must be distributed among its partners $P(2) = \{1, 2, 3\}$, proportionally to the number of PCIs each partner shares with country 2. Specifically, country 1 and country 2 share one PCI, so $|\mathcal{E}(12)| = 1$. Countries 2 and 3 share two PCIs, hence $|\mathcal{E}(23)| = 2$. By convention, each country is also considered a partner to itself, so $|\mathcal{E}(22)| = |\mathcal{E}(2)| = 3$. Accordingly, the cost of country 2 is distributed as such

<footnote n="5">⁵The Common Projects solution aligns with recent contributions in cooperative game theory focusing on proportional division of economic surplus (see, for instance, Béal et al., 2018; Csóka and Herings, 2021; van den Brink et al., 2022; Acosta-Vega et al., 2023; Csóka and Herings, 2025).</footnote>
country 1 receives

$$c_2 \times \frac{|\mathcal{E}(12)|}{|\mathcal{E}(12)| + |\mathcal{E}(23)| + |\mathcal{E}(22)|} = 1,$$

country 3 receives

$$c_2 \times \frac{|\mathcal{E}(23)|}{|\mathcal{E}(12)| + |\mathcal{E}(23)| + |\mathcal{E}(22)|} = 2,$$

and country 2 itself receives

$$c_2 \times \frac{|\mathcal{E}(22)|}{|\mathcal{E}(12)| + |\mathcal{E}(23)| + |\mathcal{E}(22)|} = 3,$$

which effectively sums up to $c_2 = 6$. Turning to countries 1 and 3, note that each has only one partner (namely, country 2). Hence, their costs are divided exactly as in the Egalitarian solution. Aggregating all of these cost redistribution, we obtain $CPS(c, \mathcal{E}) = (3, 9, 6)$.

To characterize the Common Projects solution, it is enough to introduce one additional axiom. Recall the thought experiment that motivated the Independence of irrelevant projects and Symmetry axioms. The new axiom requires that any change in the cost of a given country $k$ be divided among its partners in proportion to the number of PCIs they hold with $k$. In practical terms, if partner $i$ is involved in twice as many PCIs with $k$ as partner $j$, then $i$ should bear twice the impact of $k$'s cost variation compared to $j$. The rationale is that $i$ likely benefits more from its collaboration with $k$ than $j$. Therefore, it seems reasonable that $i$ provides proportionally greater support to help offset $k$'s cost.

**Proportionality (PP):** For any two $(c, \mathcal{E})$, $(c', \mathcal{E}) \in \mathbb{P}^N$ such that $c'_k \ge c_k$ for some $k \in N$ and $c'_h = c_h$ for any $h \ne k$,

$$\forall i, j \in N, \quad (f_i(c', \mathcal{E}) - f_i(c, \mathcal{E})) \times |\mathcal{E}(jk)| = (f_j(c', \mathcal{E}) - f_j(c, \mathcal{E})) \times |\mathcal{E}(ik)|.$$

While Proportionality (PP) clearly encapsulate the distributive principles underlying the Common Projects solution, it also has the feature of being general enough to imply the Independence of irrelevant projects (IIP) axiom. Indeed, if a country has no PCI in common with the country whose cost is varying—that is, they are not partners—then they should bear no impact from the variation. This latter property corresponds precisely to the axiom (IIP). Hence, (PP) implies (IIP) (Proposition 1).

**Proposition 1.** If a solution satisfies (PP), then it satisfies (IIP).

**Proof.** The proof is direct and will be omitted. □
Combining Proportionality with Efficiency is sufficient to obtain a characterization of the Common Projects solution.

**Theorem 2.** A solution $f$ on $\mathbb{P}^N$ satisfies Efficiency (E) and Proportionality (PP) if and only if it is the Common Projects solution CPS.

## 2.4. The Two-step Egalitarian solution

Finally, the Two-step Egalitarian solution (TES) proceeds in two stages. First, each country's cost is divided equally across all PCIs in which it participates. Second, the portion of the cost attributable to each PCI is further allocated equally among the participants of that PCI. The solution combines features of the two previous solutions: it departs from a purely egalitarian approach by distinguishing between different partners of the same country, yet it retains egalitarian allocation principles at two levels—across PCIs and across countries.<fnref n="6" />

**Definition 3.** The Two-step Egalitarian solution TES is defined, for each $(c, \mathcal{E}) \in \mathbb{P}^N$ as

$$ \forall i \in N, \quad TES_i(c, \mathcal{E}) = \sum_{j \in P(i)} \frac{c_j}{|\mathcal{E}(j)|} \sum_{E \in \mathcal{E}(ij)} \frac{1}{|E|}. $$

**Remark 1.** The Common Projects solution can also be understood as a Two-step allocation process that divides each country's cost among the PCIs in which they participate. Such division is proportional with respect to the PCIs' sizes. Then, each of these partial costs is further divided equally among the participants of the corresponding PCI.

**Remark 2.** In the special case where all PCIs involve the same number of countries, the two solutions Common Projects solution and Two-step Egalitarian solution coincide. In the special case where the PCIs form a partition of $N$, all the solutions discussed in this paper coincide.

**Example 3.** Consider again Example 1. To compute the Two-step Egalitarian solution, proceed as follows. Take country 2, which incurs a cost of $c_2 = 6$. The solution first distributes $c_2$ equally among all PCIs to which country 2 belongs, namely $\mathcal{E}(2) = \{\{1, 2\}, \{2, 3\}, \{2, 3\}\}$. Thus, each PCI obtains $c_2/3 = 2$. In the second step, the amount assigned to each PCI is distributed equally among its members. Specifically, in $\{1, 2\}$, countries 1 and 2 each receive $c_2/3/2 = 1$. In each of the

<footnote n="6">⁶The Two-step Egalitarian solution is inspired by two-steps solutions from cooperative game theory (see, for instance, Owen, 1977; Albizuri et al., 2006; Borkotokey et al., 2020; Abe and Nakada, 2023; Gómez-Rodríguez et al., 2024; Algaba et al., 2025).</footnote>
two instances of {2,3}, countries 2 and 3 also receive $c_2/3/2 = 1$. The same reasoning applies to the costs supported by countries 1 and 3. Aggregating all of these redistribution, we obtain $TES(c, \mathcal{E}) = (3,9,6) = CPS(c, \mathcal{E})$. This cost-allocation illustrates Remark 2.

To highlight the difference between the Two-step Egalitarian and the Common Project solutions, suppose instead that the PCIs are given by $\mathcal{E}' = \{\{1,2\}, \{2,3\}, \{1,2,3\}\}$. In this case, the PCI $\{1,2,3\}$ receives $c_2/3 = 2$, which is then divided equally among its three members. The distribution to the two other PCIs is the same as in the previous case. Consequently, we obtain $TES(c, \mathcal{E}') = (4+2/3, 7+2/3, 5+2/3)$.

To characterize the Two-step Egalitarian solution, we introduce two additional axioms, which can be interpreted as alternatives to the Symmetry axiom. The first, Project symmetry, extends the principle of symmetry to the level of entire PCIs. It stipulates that if the cost of a country $k$ changes, this variation should affect equally the cumulative allocations of the PCIs in which $k$ participates. Here, the cumulative allocation of a PCI is defined as the sum of the cost-allocations of all its members.

**Project symmetry (PCS):** For any two $(c, \mathcal{E})$, $(c', \mathcal{E}) \in \mathbb{P}^N$ such that $c'_k \ge c_k$ for some $k \in N$ and $c'_h = c_h$ for any $h \ne k$,

$$ \forall E, E' \in \mathcal{E}(k), \quad \sum_{i \in E} (f_i(c', \mathcal{E}) - f_i(c, \mathcal{E})) = \sum_{j \in E'} (f_j(c', \mathcal{E}) - f_j(c, \mathcal{E})). $$

The second axiom, Partner Symmetry, implements a restricted form of the Symmetry axiom. It states that if the cost of a country $k$ changes, this variation should affect equally the cost-allocations of all members belonging to any PCI in which $k$ participates. Importantly, the axiom does not impose any comparison between the cost-allocation variations of partners of $k$ who belong to different PCIs.

**Partner symmetry (PS):** For any two $(c, \mathcal{E})$, $(c', \mathcal{E}) \in \mathbb{P}^N$ such that $c'_k \ge c_k$ for some $k \in N$ and $c'_h = c_h$ for any $h \ne k$,

$$ \forall i, j \in E \in \mathcal{E}(k), \quad f_i(c', \mathcal{E}) - f_i(c, \mathcal{E}) = f_j(c', \mathcal{E}) - f_j(c, \mathcal{E}). $$

Observe that Symmetry implies Partner symmetry (Proposition 2), but no causal relationship can be established between Symmetry and Project symmetry. In the special case where all PCIs involve the same number of countries, Symmetry will imply Project symmetry. In fact, there
would be an equivalence between Symmetry and the combination of Project symmetry and Partner symmetry.

**Proposition 2.** If a solution satisfies (S), then it satisfies (PS).

**Proof.** The proof is direct and will be omitted. ☐

**Theorem 3.** A solution $f$ on $\mathbb{P}^N$ satisfies Efficiency (E), Project symmetry (PCS), Partner symmetry (PS), and Independence of irrelevant projects (IIP) if and only if it is the Two-step Egalitarian solution TES.

**3. Case Study**

In this section, we begin by providing context and motivation for our case study. Next, we describe how the cost-allocation problem was constructed using the available data. Then, we present the application of our three solutions. Finally, we discuss our results.

**3.1. Motivation**

CCS has emerged as a cornerstone of EU decarbonization strategies. Several countries have already set national deployment targets: France, for instance, aims to capture and store 4–8 MtCO$_2$ annually by 2030 (Comité national de l'industrie, 2023). Even where explicit targets are absent, governments increasingly regard CCS as essential for decarbonizing hard-to-abate sectors such as cement, steel, and chemicals. The Netherlands has taken a leading role, with state-backed projects like Aramis and Porthos expected to store 32 MtCO$_2$/y from European industrial emitters (Lockwood, 2025). In 2023, the Dutch government reinforced this position with a €639 million public investment to safeguard Aramis (Carbon Credits, 2025). Belgium is in the process of defining a fragmented regulatory framework (Lockwood, 2025), while Germany has signaled strong interest in CCS to achieve its climate objectives (Bundesregierung, 2025).

However, despite these ambitions, only the Netherlands is developing storage capacity. Belgium, France, and Germany will therefore depend on access to Dutch sites to meet their CCS development goals. As an illustration, each of these three countries participates in a PCI that involves Dutch storage infrastructure (Figure 2). Since PCIs support national decarbonization strategies, the issue of cost allocation at the national level is central. This case study concentrates on the three PCIs linking Belgium, France, Germany, and the Netherlands: Aramis, CO$_2$TransPorts, and the Delta Rhine Corridor.
<figure><img src="image_3.png" /><figcaption>Figure 2: Representation of Aramis (red), CO₂TransPorts (blue), and the Delta Rhine Corridor (green) PCIs.</figcaption></figure>

Aramis connects all four countries simultaneously, while the other two PCIs create bilateral links between specific subsets of member states. France, for instance, is connected to the Netherlands only through Aramis, whereas Belgium and Germany each maintain an additional PCI with Dutch infrastructure.

## 3.2. Data

In terms of data, these three PCIs provide accessible data on infrastructure components and transport volumes through their official websites. This availability makes cost estimation across countries more feasible than for less mature PCIs.

Based on available technical and cost data, we compute the total discounted cost attributable to each participating country (see Appendix B). These results are summarized in Table 1. The large cost shares involved highlight the importance of coordinated national commitments.

<table><caption>Table 1: The cost-allocation problem</caption><thead><tr><td>Country</td><td>Total Cost (in M€)</td><td>PCIs participation</td></tr></thead><tbody><tr><td>Netherlands</td><td>7659.7</td><td>Aramis, CO₂TransPorts, Delta Rhine Corridor</td></tr><tr><td>Germany</td><td>5872.4</td><td>Aramis, Delta Rhine Corridor</td></tr><tr><td>France</td><td>2080.7</td><td>Aramis</td></tr><tr><td>Belgium</td><td>1402.5</td><td>Aramis, CO₂TransPorts</td></tr></tbody></table>
### 3.3. Results

Applying our methodology, we obtain the following results in Figure 3. Firstly, we observe that all three solutions redistribute costs compared to the situation without cost-allocation (shown in grey). For the Netherlands and Germany, which make the largest upfront investments in pipelines and storage, the solutions reduce their allocated costs. For France and Belgium, which primarily use the infrastructure, costs increase.

<figure><img src="image_4.png" /><figcaption>Figure 3: Allocation results for each solution</figcaption></figure>

Looking at countries individually, the Netherlands reduces its cost allocation by 15–44% depending on the solution, reflecting its role as the main provider of transport and storage capacity to its neighbors. For France, CPS and TES allocate costs close to its actual investment (around a 10% increase), whereas EGS substantially inflates its share, more than 50% higher than CPS and roughly double TES. The case of Belgium is more striking: under all solutions, it bears costs well above its own investments, reaching levels comparable to or higher than France. This outcome is driven by Belgium's dual participation in Aramis and CO₂TransPorts, which links it closely with the Netherlands—the country with the highest infrastructure costs. Germany, by contrast, benefits the most: it reduces its own investment burden while securing access to shared storage capacity.

One could wonder which solution is the most suitable for CCS cost allocation. Choosing between these solutions depends on how their underlying axiomatic foundation align with the current development of CCS projects. All three solutions satisfy Efficiency and Independence of irrelevant
projects, ensuring that the entire cost is allocated without being distorted by unrelated PCIs.

The EGS solution has the advantage of simplicity but also the drawback of erasing the structural
differences between countries’ involvement (Symmetry). Indeed, because all countries are jointly
engaged in Aramis, every country is a partner of the other. Thus, EGS allocates costs in a way
that disregards the presence of other PCIs. This has the consequence of strongly favoring the
heaviest investors (the Netherlands and Germany) while penalizing lighter contributors (France
and Belgium). Such flattening may appear unfair in the context of CCS, as it does not encompass
the influence of other PCIs than Aramis.

The two remaining solutions, CPS and TES, refine EGS by taking the PCIs structure into
account. As highlighted in Remark 1, both can be viewed as two-step procedures: countries’ costs
are first divided across the PCIs in which they participate, and then these partial costs are divided
among the members of each PCI. The distinction lies in the first step. CPS distributes costs
proportionally to the size of each PCI, whereas TES assigns them equally across the PCIs.

The choice between the two solutions therefore depends on how one interprets the role of PCI
size. CPS’s implicitly assumes that larger PCIs reflect larger cost responsibilities (Proportionality).
In contrast, TES assumes that PCIs are similar regardless of the number of countries they involve,
and requires treating these units symmetrically (Project symmetry).

In our case study, PCI size does not provide a reliable proxy for underlying costs, since projects
differ not only in scale but also in nature, ranging from pipeline networks to shipping routes. Under
these conditions, TES appears better suited: it treats each PCI as an equal partnership, and avoids
(arbitrarily) tying cost allocations to project size. Given the early development of CCS in the
EU, a symmetric and easily interpretable allocation may in practice be more robust than one that
depends on interpreting PCI size. This recommendation may change with time, as CCS development
increases.

3.4. Discussion

Next, we discuss to which extent our paper contributes to current debates. We start by briefly
summarizing the current procedure for allocating PCIs costs between involved EU countries. In a
first step, to qualify as a PCI, project promoters must submit a specific assessment (for CCS projects)
or a cost-benefit analysis (for gas and electricity projects) that national regulatory authorities must
approve (European Commission, 2024a). Based on this assessment, the EU selects eligible projects.
As mentioned in the introduction, for CCS, 14 PCIs have been listed in the latest round (European
Commission, 2023).
However, while the specific assessment or the cost-benefit analysis identify the EU-wide benefits of a project, they do not specify how costs and benefits should be shared between participating countries. To address this gap, the European Commission introduced the **cross-border cost allocation** (CBCA) procedure, which allows national regulatory authorities to redistribute costs and benefits among Member States (European Commission, 2013).

Thus, in a second step, project promoters submit a joint investment request, including an eventual CBCA proposal, to the national regulatory authorities.<fnref n="7" /> National regulatory authorities then consider the submission and decide to proceed with the PCI or not. ACER takes the final decision if the national regulatory authorities do not reach an agreement (ACER, 2025).

**Policy debates** on the PCI framework primarily revolve around two key elements: the cost-benefit analysis (CBA) and the CBCA procedure, as well as the interaction between the two. Regarding the CBA, several revisions have been made to the methodologies for gas and electricity (Schittekatte et al., 2021). Regarding the CBCA procedure, previous recommendations summarized in Schittekatte et al. (2021) include: (i) allocating the full expected efficient investment costs in the investment request (ACER, 2015), (ii) basing CBCA agreements on CBA results (ACER, 2015; Meeus and He, 2014; Meeus and Keyaerts, 2015), (iii) formalizing CBCA through binding contracts with performance incentives (Meeus and He, 2014; Meeus and Keyaerts, 2015), and (iv) agreeing on a set of projects rather than individual ones (ACER, 2023; Meeus, 2023).

In practice, however, CBCA has played a marginal role: less than 1% of capital expenditures have been transferred across borders, suggesting that most projects rely on national cost recovery (ACER, 2025) or that the procedure is not well adapted in practice.

Our study relates to the design of CBCA, but departs from its current practice by considering only cost-sharing, not benefit-sharing. We illustrate how the cost allocation element of CBCA can be formalized without incorporating benefits. Notably, our framework addresses some of the existing policy recommendations, such as considering a set of projects (recommendation (iv)) and allocating the full expected investment costs without relying on external funding (recommendation (i)).

**Future work** could extend our cost-allocation model into a complete CBCA procedure by adding a second-stage benefit-sharing mechanism. This sequencing is justified by the timing asymmetry between costs and benefits: investment costs are immediate and observable, while benefits

<footnote n="7">⁷CBCA is indeed an option and not an obligation: national states might prefer to adopt the "territorial principle" meaning that each country deals with the cost on its own territory.</footnote>
are long-term and uncertain (Schittekatte et al., 2021).

Finally, it is important to note that CBCA itself has been widely criticized, and that current pol-
icy debates increasingly explore alternatives rather than refinements to CBCA. For example, recent
analyses by Meeus (2025, 2023) propose alternative cooperation mechanisms such as cross-border
contracts for difference or regional investment funds to replace the CBCA procedure. While our
study may help formalize and clarify cost-sharing (without benefit-sharing) of the CBCA process,
this paper does not claim that CBCA is the most suitable framework for allocating PCI costs.

4. Conclusion

This paper develops a framework for allocating CCS-related costs among countries participat-
ing in cross-border PCIs. We model the problem as a cost allocation exercise, enhanced with a
hypergraph structure to capture the inherently multi-country nature of these projects. Within this
setting, we propose three cost-allocation solutions, each grounded in a distinct distributive principle,
and provide corresponding axiomatic characterizations.

We then apply these solutions to a case study involving Belgium, France, the Netherlands,
and Germany. In this context, the Two-step Egalitarian solution emerges as the most meaningful
approach, particularly given the early stage of CCS deployment in Europe.

From a policy perspective, our contribution lies in a theoretical exploration of the cost-sharing
component of the CBCA framework rather than a full proposal for cross-border cost and benefit
allocation. However, other studies and policy papers have acknowledged that CBCA, as currently
designed, may not be the most effective mechanism for coordinating PCI investments. Nonetheless,
by isolating and formalizing its cost-sharing dimension, we provide a theoretical benchmark that
can inform both future revisions of CBCA and the design of alternative cooperation mechanisms.

Acknowledgments

We thank Yannick Perez and participants of the LGI working paper days seminar for useful
comments on an earlier version of this work. We thank FSR members for their relevant comments
and feedback on the paper. We especially thank Kevin Techer for insightful comments on the
axiomatic study, and Philippe Solal for comments on the model.
# Appendix A. Proofs of the axiomatic results

In this appendix, we provide the demonstration and the logical independence of our axiomatic results. We will omit the demonstration of Theorem 2 as it is very similar to that of Theorem 1.

**Proof of Theorem 1:** It is direct to prove that the Egalitarian solution EGS satisfies (E), (S) and (IIP). It remains to prove that any solution on $\mathbb{P}^N$ satisfying (E), (S) and (IIP) coincides with EGS. Pick any such solution $f$ and let us prove that, for any $(c, \mathcal{E}) \in \mathbb{P}^N$, $f(c, \mathcal{E}) = EGS(c, \mathcal{E})$. We proceed by induction on the number of null coordinates of $c$, which we denote by $0(c) = |\{i \in N : c_i = 0\}|$.

**Initialization:** First, pick $c \in \mathbb{R}_+^n$ such that $0(c) = n$, then by definition of a solution $f_i(c, \mathcal{E}) = 0 = EGS_i(c, \mathcal{E})$ for each $i \in N$. Next, pick $c \in \mathbb{R}_+^n$ such that $0(c) = n - 1$. In that case, there exists a $k \in N$ such that $c_k > 0$ and $c_h = 0$ for any $h \neq k$. By (IIP), $f_i(c, \mathcal{E}) = 0 = EGS_i(c, \mathcal{E})$ for any $i \notin P(k)$. If $P(k) = \{k\}$, then by (E), $f_k(c, \mathcal{E}) = c_k = EGS_k(c, \mathcal{E})$. Otherwise, if $|P(k)| > 1$, then by (S), for any two $i, j \in P(k)$, $f_i(c, \mathcal{E}) = f_j(c, \mathcal{E})$. Combining these equations with (E), we can obtain a solvable systems of $|P(k)|$ equations with a unique solution given by $f_i(c, \mathcal{E}) = \frac{1}{|P(k)|}c_k = EGS_i(c, \mathcal{E})$ for each $i \in P(k)$.

**Hypothesis:** Now assume that there exists a $W \in \{2, \dots, n-1\}$ such that for any $c \in \mathbb{R}_+^n$, $0(c) \le W$, $f(c, \mathcal{E}) = EGS(c, \mathcal{E})$.

**Induction:** Consider any $c \in \mathbb{R}_+^n$ such that $0(c) = W + 1$. Pick any $k \in N$ such that $c_k > 0$. Consider the problem $(c', \mathcal{E}) \in \mathbb{P}^N$ such that $c'_k = 0$ and $c'_h = c_h$ for any $h \neq k$. Observe that $0(c') = W - 1$. By the induction hypothesis, $f(c', \mathcal{E}) = EGS(c', \mathcal{E})$. By (IIP), $f_i(c, \mathcal{E}) = f_i(c', \mathcal{E}) = EGS_i(c', \mathcal{E}) = EGS_i(c, \mathcal{E})$ for any $i \notin P(k)$. If $P(k) = \{k\}$, then by (E), $f_k(c, \mathcal{E}) = f_k(c', \mathcal{E}) + (c_k - c'_k) = EGS_k(c', \mathcal{E}) + (c_k - c'_k) = EGS_k(c, \mathcal{E})$. Otherwise, if $|P(k)| > 1$, then by (S), for any two $i, j \in P(k)$, $f_i(c, \mathcal{E}) - f_i(c', \mathcal{E}) = f_j(c, \mathcal{E}) - f_j(c', \mathcal{E})$. Combining these equations with (E), we obtain a solvable systems of $|P(k)|$ equations with a unique solution given by $f_i(c, \mathcal{E}) = f_i(c', \mathcal{E}) + \frac{1}{|P(k)|}(c_k - c'_k) = EGS_i(c', \mathcal{E}) + \frac{1}{|P(k)|}(c_k - c'_k) = EGS_i(c, \mathcal{E})$ for each $i \in P(k)$. Therefore, $f_i(c, \mathcal{E}) = EGS_i(c, \mathcal{E})$ for each $i \in N$. This conclude the induction and the proof. $\square$

**Proof of Theorem 3** It is direct to prove that the Two-step Egalitarian solution TES satisfies (E), (PCS), (PS) and (IIP). It remains to prove that any solution on $\mathbb{P}^N$ satisfying (E), (PCS), (PS) and (IIP) coincides with TES. Pick any such solution $f$ and let us prove that, for any $(c, \mathcal{E}) \in \mathbb{P}^N$, $f(c, \mathcal{E}) = TES(c, \mathcal{E})$. For as for the proof of Theorem 1, we proceed by induction on $0(c)$ the number of null coordinates of $c$.
**Initialization:** First, pick $c \in \mathbb{R}_+^n$ such that $0(c) = n$, then by definition of a solution $f_i(c, \mathcal{E}) = 0 = TES_i(c, \mathcal{E})$ for each $i \in N$. Next, pick $c \in \mathbb{R}_+^n$ such that $0(c) = n - 1$. In that case, there exists a $k \in N$ such that $c_k > 0$ and $c_h = 0$ for any $h \neq k$. By (IIP), $f_i(c, \mathcal{E}) = 0 = TES_i(c, \mathcal{E})$ for any $i \notin P(k)$. If $P(k) = \{k\}$, then by (E), $f_k(c, \mathcal{E}) = c_k = TES_k(c, \mathcal{E})$. Otherwise, if $|P(k)| > 1$, then by (PCS), for any two $E, E' \in \mathcal{E}(k)$, $\sum_{i \in E} f_i(c, \mathcal{E}) = \sum_{j \in E'} f_j(c, \mathcal{E})$. By (E), it follows that, for each $E \in \mathcal{E}(k)$, $\sum_{i \in E} f_i(c, \mathcal{E}) = c_k/|\mathcal{E}(k)|$. For each $E \in \mathcal{E}(k)$, one can apply (PS) and obtain that, for each $i, j \in E$, $f_i(c, \mathcal{E}) = f_j(c, \mathcal{E})$. Since $\sum_{i \in E} f_i(c, \mathcal{E}) = c_k/|\mathcal{E}(k)|$, we can obtain, for each $E \in \mathcal{E}(k)$, a solvable systems of $|E|$ equations with a unique solution given by $f_i(c, \mathcal{E}) = \frac{1}{|E|} \frac{c_k}{|\mathcal{E}(k)|} = TES_i(c, \mathcal{E})$ for each $i \in E$.

**Hypothesis:** Now assume that there exists a $W \in \{2, \dots, n - 1\}$ such that for any $c \in \mathbb{R}_+^n$, $0(c) \le W$, $f(c, \mathcal{E}) = TES(c, \mathcal{E})$.

**Induction:** Consider any $c \in \mathbb{R}_+^n$ such that $0(c) = W + 1$. Pick any $k \in N$ such that $c_k > 0$. Consider the problem $(c', \mathcal{E}) \in \mathbb{P}^N$ such that $c'_k = 0$ and $c'_h = c_h$ for any $h \neq k$. Observe that $0(c') = W - 1$. By the induction hypothesis, $f(c', \mathcal{E}) = TES(c', \mathcal{E})$. By (IIP), $f_i(c, \mathcal{E}) = f_i(c', \mathcal{E}) = TES_i(c', \mathcal{E}) = TES_i(c, \mathcal{E})$ for any $i \notin P(k)$. If $P(k) = \{k\}$, then by (E), $f_k(c, \mathcal{E}) = f_k(c', \mathcal{E}) + (c_k - c'_k) = TES_k(c', \mathcal{E}) + (c_k - c'_k) = TES_k(c, \mathcal{E})$. Otherwise, if $|P(k)| > 1$, then by (PCS), for any two $E, E' \in \mathcal{E}(k)$,

$$ \sum_{i \in E} (f_i(c, \mathcal{E}) - f_i(c', \mathcal{E})) = \sum_{j \in E'} (f_j(c, \mathcal{E}) - f_j(c', \mathcal{E})). $$

By (E), it follows that, for each $E \in \mathcal{E}(k)$, $\sum_{i \in E} (f_i(c, \mathcal{E}) - f_i(c', \mathcal{E})) = (c_k - c'_k)/|\mathcal{E}(k)|$. For each $E \in \mathcal{E}(k)$, one can apply (PS) and obtain that, for each $i, j \in E$, $f_i(c, \mathcal{E}) - f_i(c', \mathcal{E}) = f_j(c, \mathcal{E}) - f_j(c', \mathcal{E})$. Since $\sum_{i \in E} (f_i(c, \mathcal{E}) - f_i(c', \mathcal{E})) = (c_k - c'_k)/|\mathcal{E}(k)|$, we can obtain, for each $E \in \mathcal{E}(k)$, a solvable systems of $|E|$ equations with a unique solution given by $f_i(c, \mathcal{E}) = \frac{1}{|E|} \frac{c_k - c'_k}{|\mathcal{E}(k)|} = TES_i(c, \mathcal{E})$ for each $i \in E$. Therefore, $f_i(c, \mathcal{E}) = TES_i(c, \mathcal{E})$ for each $i \in N$. This conclude the induction and the proof. $\square$

**Logical independence:** To show that each axiom is necessary in each of our axiomatic results, we provide counter-examples.

* The solution $f$ defined as $f(c, \mathcal{E}) = (0, \dots, 0)$, for each $(c, \mathcal{E}) \in \mathbb{P}^N$, satisfies all the axioms aside from Efficiency (E).

* The solution $f$ defined as $f_i(c, \mathcal{E}) = \sum_{i \in N} c_i/|N|$, for each $(c, \mathcal{E}) \in \mathbb{P}^N$ and each $i \in N$, satisfies Efficiency (E) and Symmetry (S), but fails Independence of irrelevant projects (IIP).
* The Common Project solution satisfies Efficiency (E) and Independence of irrelevant projects (IIP), but fails Symmetry (S).

* The Egalitarian solution satisfies Efficiency (E), but fails Proportionality (PP).

* Consider any $\omega \in \mathbb{R}_{++}^{|N|}$. The solution $f^\omega$ defined as

$$f_i^\omega(c, \mathcal{E}) = \sum_{j \in P(i)} \frac{c_j}{|\mathcal{E}(j)|} \sum_{E \in \mathcal{E}(ij)} \frac{\omega_i}{\sum_{k \in E} \omega_k},$$

for each $(c, \mathcal{E}) \in \mathbb{P}^N$ and each $i \in N$, satisfies Efficiency (E), Project symmetry (PCS), and Independence of irrelevant projects (IIP), but fails Partner symmetry (PS).

* The Egalitarian solution satisfies Efficiency (E), Partner symmetry (PS), and Independence of irrelevant projects (IIP), but fails Project symmetry (PCS).

* The solution $f$ defined as

$$f_i(c, \mathcal{E}) = \frac{\sum_{j \in N} c_j}{|\mathcal{E}|} \sum_{E \in \mathcal{E}(i)} \frac{1}{|E|},$$

for each $(c, \mathcal{E}) \in \mathbb{P}^N$ and each $i \in N$, satisfies Efficiency (E), Project symmetry (PCS), and Partner symmetry (PS), but fails Independence of irrelevant projects (IIP).

## Appendix B. Cost per country details

In this Appendix, we detail the methodology, the data curation and the discounted costs infrastructure component, thus providing the data presented in Table 1. A schematic representation of each infrastructure component under consideration is given in the Figure B.4. Pipelines are numbered from P0 to P8, storage sites include S0 and S1, and the shipping route is titled Sh0. For ease of visualization, pipeline P1's length and regions Bretagne and Pays-de-la-Loire sizes have been reduced.
<figure><img src="image_5.png" /><figcaption>Figure B.4: Schematic representation of the infrastructure components.</figcaption></figure>

## Appendix B.1. Data

Since the exact cost breakdown of PCIs is not publicly disclosed, we estimate the cost of each infrastructure component using technical data available on the projects' websites and from European Commission project descriptions.

In particular, storage site capacities are often specified: approximately 2.5MtCO₂/year over 15 years for site S0 (P18 field, CO₂TransPorts), and around 22MtCO₂/year for 25 years for site S1 (K14 field, Aramis). However, pipeline transport capacities are generally not reported directly.

To infer transport capacity for these pipelines, we proceed upstream from storage assumptions. For instance, the P1 pipeline's capacity is derived by subtracting the transport by ship (around 2.3MtCO₂/year, as indicated on the GOCO₂ site) from the total storage input.

For pipelines P3 through P7, which serve various industrial clusters, we assume that capacity is allocated proportionally to estimated regional capture potential within each cluster. We obtain the Table B.2 below.
<table><caption>Table B.2: Data description for each considered infrastructure component of PCIs Aramis, CO₂TransPorts, and Delta Rhine corridor</caption><thead><tr><td>Component</td><td>Description</td><td>Calculation methodology</td></tr></thead><tbody><tr><td>P0</td><td>Offshore, dense phase, 2.5 MtCO<sub>2</sub>/y, 22km, 15 years</td><td>Sievert et al. (2025)</td></tr><tr><td>P1</td><td>Offshore, dense phase, 19.7 MtCO<sub>2</sub>/y, 200km, 25 years</td><td>Sievert et al. (2025)</td></tr><tr><td>P2</td><td>Onshore, gaseous phase, 22.2 MtCO<sub>2</sub>/y, 30 km, 25 years</td><td>Oeuvray et al. (2024)</td></tr><tr><td>P3</td><td>Onshore, dense phase, 7.1 MtCO<sub>2</sub>/y, 42 km, 25 years</td><td>Sievert et al. (2025)</td></tr><tr><td>P4</td><td>Onshore, dense phase, 15.1 MtCO<sub>2</sub>/y, 114 km 25 years</td><td>Sievert et al. (2025)</td></tr><tr><td>P5</td><td>Onshore, dense phase, 11.7 MtCO<sub>2</sub>/y, 45 km, 25 years</td><td>Sievert et al. (2025)</td></tr><tr><td>P6</td><td>Onshore, dense phase, 2.4 MtCO<sub>2</sub>/y, 73 km, 25 years</td><td>Sievert et al. (2025)</td></tr><tr><td>P7</td><td>Onshore, dense phase, 1.0 MtCO<sub>2</sub>/y, 35 km, 25 years</td><td>Sievert et al. (2025)</td></tr><tr><td>P8</td><td>Onshore, dense phase, 2.3 MtCO<sub>2</sub>/y, 400 km, 25 years</td><td>Sievert et al. (2025)</td></tr><tr><td>Sh0</td><td>Shipping, 2.3 MtCO<sub>2</sub>/y, 1080 km, 25 years</td><td>Sievert et al. (2025)</td></tr><tr><td>S0</td><td>Storage in P18 field with existing storage infrastructure</td><td>Wildenborg et al. (2022)</td></tr><tr><td>S1</td><td>Storage in K14 field with new infrastructure</td><td>Wildenborg et al. (2022)</td></tr></tbody></table>

## Appendix B.2. Methodology

To determine the cost per country, we first calculate the discounted cost of each infrastructure component separately (see Figure B.4). Each component is then attributed to a single country, based on location and function. Summing these component-level costs yields the total discounted cost per country, as presented in Table 1.

The infrastructure components fall into three main categories: pipelines, shipping, and storage sites. For transport-related elements, we also include the associated conditioning costs, such as liquefaction for shipping and compression for pipelines.

*Pipelines with dense-phase CO₂:* For pipelines transporting CO₂ in dense phase, we use the spreadsheet model developed by Sievert et al. (2025) to estimate discounted costs for both the pipeline and associated compression infrastructure. Required inputs include the pipeline's lifetime, whether it is onshore or offshore, its annual transport capacity, length, and ownership model. We assume all pipelines are publicly financed.

*Pipeline with gaseous-phase CO₂:* For the single pipeline transporting gaseous CO₂ (P2), we rely on the study by Oeuvray et al. (2024), which provides a discounted unit cost per tonne of CO₂
per kilometer. This figure incorporates investment, operation and maintenance (O&M) costs, and compression. From the pipeline's length and transport volume, we compute the total discounted cost.

*Storage sites:* We adopt the unitary storage costs from Wildenborg et al. (2022), who provide undiscounted costs for storage fields on the Dutch Continental Shelf. Specifically, we use a unit cost of €3/tCO₂ for the P18 field (CO₂TransPorts) and €6/tCO₂ for the K14 field (Aramis). The difference reflects the reuse of existing infrastructure at the P18 field, in contrast to the new infrastructure required for K14. We discount the cost using a 5% discounting factor over 25 years.

## Appendix B.3. Cost per components

Applying the methodology described above, we obtain the discounted costs of each infrastructure component as shown in Table B.3.

Discounted costs are attributed to the country they serve: storage to the Netherlands, shipping to France, and pipelines to the countries whose emitters they connect. Notably, pipeline P4 is attributed to Germany, as it primarily serves German clusters despite crossing the Netherlands.
<table><caption>Table B.3: Calculated cost per PCI component and attribution to country.</caption><thead><tr><th>Component</th><th>Subcomponent</th><th>Total Discounted Cost (in M€)</th><th>Country</th></tr></thead><tbody><tr><td>P0</td><td>Pipeline</td><td>1,215.3</td><td>NED</td></tr><tr><td>-</td><td>Compression</td><td>3,670.8</td><td>NED</td></tr><tr><td>P1</td><td>Pipeline</td><td>178.1</td><td>NED</td></tr><tr><td>-</td><td>Compression</td><td>477.2</td><td>NED</td></tr><tr><td>P2</td><td>Pipeline and Compression</td><td>445.6</td><td>NED</td></tr><tr><td>P3</td><td>Pipeline</td><td>73.7</td><td>BEL</td></tr><tr><td>-</td><td>Compression</td><td>1,328.9</td><td>BEL</td></tr><tr><td>P4</td><td>Pipeline</td><td>239.2</td><td>GER</td></tr><tr><td>-</td><td>Compression</td><td>2,803.6</td><td>GER</td></tr><tr><td>P5</td><td>Pipeline</td><td>124.8</td><td>GER</td></tr><tr><td>-</td><td>Compression</td><td>2,178.1</td><td>GER</td></tr><tr><td>P6</td><td>Pipeline</td><td>71.8</td><td>GER</td></tr><tr><td>-</td><td>Compression</td><td>454.9</td><td>GER</td></tr><tr><td>P7</td><td>Pipeline</td><td>33.1</td><td>NED</td></tr><tr><td>-</td><td>Compression</td><td>191.6</td><td>NED</td></tr><tr><td>P8</td><td>Pipeline</td><td>334.4</td><td>FRA</td></tr><tr><td>-</td><td>Compression</td><td>436.1</td><td>FRA</td></tr><tr><td>Sh0</td><td>Ship</td><td>468.0</td><td>FRA</td></tr><tr><td>-</td><td>Liquefaction</td><td>842.2</td><td>FRA</td></tr><tr><td>S0</td><td>Storage</td><td>77.8</td><td>NED</td></tr><tr><td>S1</td><td>Storage</td><td>1,370.1</td><td>NED</td></tr></tbody></table>

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