Assessing CO2 value chain participation under negative emission pricing and EU industry relocation

The development of a CO 2 value chain in Europe, including carbon capture (CC) and transport and storage (T&S), is strongly influenced by carbon dioxide removal (CDR) markets and industry relocation, complicating investments on the CC and the T&S operator's side. We investigate how these two factors affect the industrial CC landscape characterized by scale economies and complementary markets. A spatially explicit optimization model is applied to a case study encompassing Northwestern Europe. By endogenizing CC and T&S within the model, we demonstrate the pivotal role of industry clusters in rolling out a CO 2 value chain. CDR credits especially could create substantially increased capture volumes, as biogenic CC becomes competitive. The resulting T&S scale economies allow sites with a low participation willingness to join the CO 2 value chain. In contrast, under scenarios with substantial industry leakage, scale advantages diminish, causing a higher risk of exclusion for small or remote emitters.