CCS is again becoming a strategic priority across Europe, particularly for hard-to-abate industries such as cement, steel and chemicals. The International Energy Agency (IEA) estimates that global carbon capture, use and storage (CCUS) deployment needs to accelerate dramatically this decade, with storage development and long project lead times among the key constraints.

The question is therefore whether clusters can solve enough of the industry’s coordination and financing problems to make large-scale deployment bankable.

Shared infrastructure, but limited savings

The theoretical case for clustering is well-established. A shared pipeline network can transport larger volumes of CO₂ than multiple dedicated pipelines, potentially reducing the cost per tonne. Storage infrastructure can similarly be shared across multiple emitters, improving utilisation of wells, compression and receiving facilities.

But clustering does not eliminate the highest cost in the CCS chain. The IEA estimates that capture typically accounts for almost 75% of total CCUS costs, although the figure varies considerably according to the source and concentration of CO₂. Transport generally represents well under 25% of project costs. A shared pipeline may be significantly cheaper than several dedicated pipelines, but that saving does not automatically make an expensive capture plant economic.

The stronger argument for clusters may therefore be risk allocation rather than cost reduction. For example, a dedicated transport and storage operator can separate the investment decision facing an industrial emitter from the risks associated with building and operating pipelines, terminals and injection wells. An emitter needs confidence that the infrastructure will be available and that its CO₂ will be accepted at an agreed price. If those services are provided under sufficiently robust commercial arrangements, the emitter does not have to finance the entire CCS chain itself. This is potentially more important to investors than a reduction in pipeline costs alone.

The Northern Lights cluster

Norway’s Northern Lights cluster provides the clearest European example of the model in operation. The project, owned in equal shares by Equinor, Shell and TotalEnergies, began receiving and injecting its first CO₂ in August 2025. Phase 1 has a capacity of 1.5mn t/y and was fully booked by customers in Norway and Europe. The CO₂ is transported by ship to a receiving terminal at Øygarden and then by pipeline to a storage site around 2,600 metres beneath the seabed.

Its customer base demonstrates the potential of an open-access system. Northern Lights has commercial agreements with Heidelberg Materials and Hafslund Celsio in Norway, Yara in the Netherlands, Ørsted in Denmark and Stockholm Exergi in Sweden. This is important because the value proposition is not restricted to emitters located immediately beside a storage site. Shipping allows CO₂ to move across national borders, potentially turning geological storage into a service for industrial regions that lack suitable domestic storage.

The model has attracted further investment. In March 2025, the Northern Lights partners took a final investment decision (FID) on Phase 2, a NOK7.5bn ($780mn) investment that will increase transport and storage capacity from 1.5mn t/y to more than 5mn t/y from 2028. The decision followed a 15-year agreement with Stockholm Exergi for 900,000t/y of biogenic CO₂.

Northern Lights therefore offers evidence that shared infrastructure can attract customers and support expansion. But it also illustrates the importance of public involvement. The project was developed as part of Norway’s Longship programme, with state backing helping to establish the infrastructure and market. It demonstrates that public support can help create an infrastructure platform on which private commercial relationships can subsequently develop – not that clusters make CCS possible independent of government support.

The UK’s cluster experiment

The UK has adopted a more interventionist model, selecting clusters through a competitive process and using government-backed business models to support investment. Track 1 comprises HyNet in the northwest of England and North Wales and the East Coast Cluster in Teesside and the Humber. In October 2024, the government announced up to £21.7bn of funding over 25 years for the initial CCUS programme. The government says the first projects are expected to bring around £8bn of private investment.

There has been tangible progress: the East Coast Cluster transport and storage network and Net Zero Teesside reached financial close in December 2024, followed by the HyNet transport and storage network in April 2025. The government’s latest accounting describes the first five major CCUS projects as having reached financial close and entered construction. This suggests that the cluster model can move CCS projects beyond the development stage and towards construction when the infrastructure, capture projects and government support mechanisms are sufficiently aligned.  

However, it also reveals the limits of the model. The UK has not created a self-sustaining CCS market simply by designating clusters. Instead, it has created a framework in which the state takes on a substantial share of the early-stage risk. The government’s own stated ambition is eventually to move from market creation, through market transition, to a competitive and self-sustaining CCUS market. That transition has yet to be demonstrated.

Track 2 illustrates the challenge. The Acorn project in Scotland and Viking in the Humber were selected as the two preferred Track 2 transport and storage systems in 2023, with the intention of establishing two additional clusters. But their progression remains subject to further decisions, due diligence, consenting, affordability and value-for-money assessments.

The UK’s cluster strategy has therefore reduced some investment uncertainty but has also made project developers dependent on a complex sequence of government decisions. For investors, predictability is almost as important as the headline level of support.

Ravenna – another route?

Italy’s Ravenna CCS project offers a different model. Developed by Eni and Snam, Ravenna began CO₂ injection in September 2024. Phase 1 captures approximately 25,000t/y of CO₂ from Eni’s natural gas treatment plant at Casalborsetti and transports it through repurposed gas infrastructure to a depleted offshore field around 3,000 metres below the Adriatic seabed. Eni says the capture system has achieved more than 90% efficiency, with peaks of 96%.

The significance of Ravenna lies less in the scale of its initial operation than in what is being built around it. Phase 2 is intended to reach approximately 4mn t/y of transport and storage capacity by 2030, with potential expansion to 16mn t/y. The wider Callisto project is intended to connect industrial sources in Italy and France with Ravenna’s offshore storage through a multimodal CO₂ network.

Callisto has been included on the EU’s list of Projects of Common Interest, strengthening its position within the emerging European CO₂ infrastructure network. Ravenna therefore points towards a more geographically dispersed European model, in which CO₂ can be collected from multiple industrial centres and moved by different transport modes to shared storage. But here, too, the distinction between an operating demonstration and a fully developed cluster is important. Ravenna’s large-scale industrial network is still being developed and authorised, and the commercial case has not yet been proven at the scale envisaged.

Does clustering unlock private finance?

The evidence from Europe suggests that clustering can improve the conditions for private investment, but it does not currently remove the need for public support. This is unsurprising as CCS involves several interdependent investments that must be made in the right sequence. An industrial company will hesitate to commit billions to capture equipment if there is no assured transport and storage service. But an infrastructure developer cannot easily justify a large pipeline and storage system without contracted volumes from emitters.

Clusters can help because they aggregate demand. Instead of building infrastructure for one emitter, developers can establish a network intended to serve multiple customers. The resulting diversification can make the infrastructure more resilient and improve utilisation over time.

Yet aggregation introduces a new risk: who pays if the expected volumes do not materialise? A pipeline designed for several emitters may have attractive economics when fully utilised and poor economics when only a fraction of its capacity is contracted. This makes utilisation and long-term contracting central to the investment case.

The UK approach attempts to address this through government-backed business models and long-term support. Its experience demonstrates that clustering can attract private capital: the government says the first projects have secured around £8bn of private investment. But the scale of public intervention also demonstrates that private capital is not yet willing to absorb the full risk of the emerging CCS value chain.

For investors, predictability is almost as important as the headline level of support. 
 

The real test is sequencing

The strongest case for industrial clusters is therefore not that they make carbon capture cheap, although they can lower the unit cost of shared transport and storage. They can also increase utilisation of infrastructure and give emitters access to storage without requiring each company to develop its own complete CCS chain. Potentially most importantly, they can separate some of the risks that currently make individual CCS projects difficult to finance.

But the evidence from Northern Lights, the UK’s Track 1 clusters and Ravenna suggests that these benefits are not sufficient on their own. The central problem is sequencing. Transport and storage infrastructure needs credible commitments before capture investors will proceed. Capture projects need to commit sufficient volumes before infrastructure developers can justify their investment. Thus governments have to decide how much of that early-stage coordination risk they are prepared to absorb.

Northern Lights shows one route: public backing combined with an anchor customer and an open-access commercial model. The UK is forging another: government-selected clusters backed by substantial long-term support. Ravenna is developing towards a third: combining an existing storage asset with a wider European network.

None has yet demonstrated that CCS clusters can operate at scale without some form of public intervention. Shared infrastructure can address a significant part of the transport, storage and coordination challenge. It cannot by itself solve high capture costs, uncertain utilisation or the need for long-term revenue certainty. Europe’s industrial hubs therefore face a more difficult task than simply building pipelines and storage sites. They need to build markets around them.

If the next generation of clusters can secure sufficient volumes, allocate risk clearly between emitters and infrastructure operators, and establish stable revenue mechanisms, the shared-infrastructure model could become an important foundation for a European CCS industry. If those conditions are absent, clusters risk becoming expensive infrastructure waiting for customers.

The question is no longer whether there is a theoretical case for clustering. The first projects are demonstrating that there is. The more consequential question is whether that model can mature from government-enabled infrastructure into a genuinely competitive market.

• Further reading: ‘Fragmented carbon capture value chain puts EU storage target at risk’. New analysis suggests the EU’s carbon capture ambitions are being held back because carbon capture, transport and storage infrastructure are not developing in step, despite continued investment in individual projects.
• ‘Cracking the carbon storage code, from well test to success’. Discover why well testing is a foundation for successful carbon capture and storage projects.