Non pipeline transport of CO₂: a new focus for CCUS policy

To support its carbon capture ambitions, the UK Government is expanding its focus beyond pipelines. On 5 February 2026, the Department for Energy Security and Net Zero launched a landmark consultation on the non-pipeline transport (NPT) of CO₂ (for example, transportation by road, rail, ship or barge) as part of the UK’s carbon capture, usage and storage (CCUS) framework. 

This follows on from the consultation that the UK Government launched at the end of November 2024 on the inclusion of NPT into the UK Emissions Trading Scheme (UK ETS) – the results of which are still awaited. 

To date, CCUS policy has centred on pipeline-based transport through projects such as Hynet and the East Coast Cluster. However, for many businesses pipeline transportation of CO₂ simply isn't economically or technically viable yet. Therefore, this consultation should be of great interest to CO₂ emitters who are not located close to the existing pipeline-based CCUS clusters, those with CCUS projects who do not rely on pipelines and potential NPT logistics providers.

Why is the Government stepping in?

DESNZ has identified several market failures which it considers justify government intervention in the development of NPT. These include:

• Existing carbon markets do not currently generate sufficient revenue to support CCUS deployment, with the cost per tonne of captured and stored CO₂ exceeding prevailing carbon prices
• CCUS requires coordinated investment across capture, transport and storage, a challenge that is more pronounced for NPT where value chains may involve a greater number of parties and interfaces – 27 out of 36 responses to the NPT Call for Evidence in 2024 stated that costs associated with the full NPT value chain were a barrier to investment
• the first mover disadvantage of high upfront capital costs and elevated risk. 

DESNZ also identifies several cross chain risks associated with NPT, including revenue uncertainty where CO₂ is lost before reaching storage, stranded asset risk where infrastructure is underutilised, CO₂ quality risk, and timing mismatches between capture, transport and storage availability. 

Against this backdrop, the consultation asks a fundamental question: how should Government support NPT development to overcome these barriers, and who should bear which risks across the value chain?

Five options on the table

DESNZ has evaluated five (5) delivery options for subsidising NPT costs:

• Option A - one or multiple entities operate part of the NPT solution and each have a direct contract with Government
• Option B - NPT services are delivered by regulated transport and storage companies (T&SCos). NPT costs would be recovered by T&SCos through capture business models, with payment flowing from the capture project to the T&SCo
• Option C - NPT services are an extension of, and operated by, the capture project. NPT costs are included within the capture contracts and considered as part of the overall business model support package
• Option D - Government supports NPT service providers by providing one-off grant funding and/or offering an agreement on capital co-investment (e.g. loans, guarantees, equity shares)
• Option E – No central government contract with NPT service provider but capture projects would contract directly with an NPT service provider and pass on the NPT fee back to Government via a new annex in their capture business model contracts. The consultation envisages that the Government will agree the NPT fee directly with the capture projects deploying via NPT so there will be no need for Government to have a direct contractual relationship with the capture project’s chosen NPT service providers.

The Government's preference? Option E-largely because it builds on existing capture business models, meaning less resource would be required to establish a new mechanism and, crucially, faster roll-out of NPT support.

How would the NPT fee work?

The NPT fee would cover NPT-specific costs necessary for processing and transporting CO₂ from the capture facility to either the entry point of the piped T&S network or a direct injection facility.

The consultation explores three (3) different options for NPT fee structures of which a throughput-only fee option is DESNZ’s indicative position. Under this option the NPT fee is payable solely on CO₂ volumes delivered to the T&S delivery point on a £/tonne basis. 

This approach is likely to raise concerns for those involved in certain NPT projects as volume losses between the ‘originating installation’ and the ‘receiving installation’ are likely to be unavoidable across the supply chain and the November 2024 UK ETS consultation for NPT proposes a regulatory model under which CO2 emissions from volume losses (as well as NPT transport emissions) will need to be accounted for under the UK ETS (and therefore costed into NPT transportation arrangements).

The other two options put forward in the consultation are both base plus throughput models – one based on performance of the NPT solution as a whole and the other based on the individual performance of each element in the chain. Under these models, a base component is payable based on performance measures (availability and successful delivery of 100% of CO2) and then a throughput element is payable based on amounts delivered.

It’s also worth noting that, under the indicative throughput only option (but not the base plus throughput models), not only would the NPT fee be based on the amount delivered but also the capture projects costs would be as well. This means that the capture project is exposed to the performance of their associated NPT solution – something which would likely be passed on the NPT service provider as a cost risk.

Where do the risks fall?

As outlined above, DESNZ has identified a number of cross chain risks associated with NPT:

• stranded asset risk where there is a permanent loss of: i) demand for the NPT solution, or ii) supply of storage capacity at the T&SCo,
• CO₂ quality risk, and
• delivery timing mismatches between the capture, transport and storage assets. 

In respect of stranded asset risk, the consultation suggests that the Government would consider including a termination fee for the NPT solution which would be payable to the capture project and then on to the NPT service provider). However, the consultation suggests that the other issues should be managed commercially between the NPT service provider and the capturing entity as part of their contracting arrangements.

Next steps

The success of NPT will be pivotal to the UK’s broader CCUS strategy. With several key areas still open for input, there is a genuine opportunity to shape policy. If you may rely on NPT for your capture project, or if you intend to provide all or part of an NPT solution, now is the time to respond.

The consultation closes on 1 May 2026 and can be responded to either online at: CCUS non-pipeline transport or via email to  [email protected].

Having supported on a number of carbon capture schemes and a nationally recognised transport team, our firm is well placed to advise you on all elements of the CCUS chain. If you have any questions regarding this article please contact Nick Churchward, Lydia Cullimore, Greg Fearn or your usual Burges Salmon contact.

This article was written with contributions from Nick Churchward, Lydia Cullimore, Greg Fearn and Ryan Millett