Cost allocation in CO2 transport: A multi-actor perspective

• Published in: Journal of cleaner production 2024-01, Vol.435, p.140271, Article 140271
• Main Authors: van Beek, Andries, Groote Schaarsberg, Mirjam, Borm, Peter, Hamers, Herbert, Veneman, Mattijs
• Format: Article
• Language: English
• Subjects: Cost allocation; Industrial decarbonization; Multi-actor infrastructure; Regional CO2 transport hubs
• ISSN: 0959-6526; 1879-1786
• DOI: 10.1016/j.jclepro.2023.140271

This paper provides a multi-actor perspective on the realization of new infrastructures, motivated by the necessity for infrastructures to support the ongoing climate and energy transition in general, and CO2 transport infrastructures for carbon capture, utilization and storage (CCUS) in particular. We develop a general model to represent infrastructures that allows for a unique decomposition into ‘elementary infrastructure components’ based on heterogeneous user requirements. Notably, it incorporates a cost function with a very generic and adaptable structure, for which we can still explicitly determine the costs of each individual component. As a direct consequence an intuitive cost allocation rule is obtained: equal component cost sharing. This allocation rule is in line with existing game-theoretic concepts and satisfies the desirable properties of advantageous scaling and coalitional rationality. Advantageous scaling guarantees that the costs allocated to each existing user do not increase if the number of users grows larger and coalitional rationality ensures that there is no subgroup of infrastructure users that would have a financial reason to object to the cost allocation. Additionally, we examine the application of our model to a prospective CO2 transport infrastructure for CCUS in the port of Rotterdam and the adjoining industry area. •Infrastructures and corresponding costs are modeled in a component-based manner.•Elementary infrastructure components account for heterogeneous user requirements.•Equal component cost sharing satisfies desirable properties and enables cooperation.•Case study demonstrates CO2 transport infrastructures are a suitable application.