Cost allocation for European CCS projects

David Lowing and Adrien Nicolle
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Adrien Nicolle: Florence School of Regulation, European University Institute

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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 (search for similar items in EconPapers)
Date: 2025-11-04
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