The transition to a net-zero energy system by 2050 requires significant emission reductions in hard-to-abate industrial sectors, where Carbon Capture and Storage (CCS) is increasingly recognized as an indispensable bridging technology. Similarly, future negative emission technologies using CCS are essential to offset emissions elsewhere. However, the large-scale deployment of CCS infrastructure faces fundamental governance challenges, specifically regarding how to coordinate investments across a fragmented value chain characterized by high capital intensity, asset specificity, and deep uncertainty. This thesis investigates how governance frameworks can be designed to mitigate coordination failures, utilization risks, and market power concerns within the developing Dutch CCS market.
Adopting a mixed-method approach, this research combines a qualitative system analysis and stakeholder interviews with a quantitative techno-economic optimization model (PyPSA). The methodology integrates insights from policymakers and infrastructure operators with a multi-period model that simulates the cost-optimal rollout of transport and storage infrastructure from 2030 to 2050.
The analysis identifies distinct risks hindering market development. Qualitatively, interviews reveal that coordination risks create a "chicken-and-egg" problem in the start-up phase, preventing Final Investment Decisions (FID). Quantitatively, the model identifies utilization risk as the most critical factor for economic viability. Notably, the system is highly sensitive to cross-border flows, where a lack of import volume creates significant stranded asset risks. Furthermore, the model confirms the natural monopoly characteristics of the pipeline backbone, demonstrating that ship transport remains approximately 38% more expensive than fully utilized pipeline transport, limiting its viability as a competitive alternative in a mature market.
To address these challenges, a governance options framework is developed based on Transaction Cost Economics and Network Regulation Theory. The findings demonstrate that no single mechanism is sufficient and that governance must be adaptive to specific phases of development. To resolve initial coordination failures, the thesis recommends financial incentives such as state guarantees and structural coordination through Public-Private Partnerships (PPPs). As the system matures and natural monopolies solidify, the governance structure must transition toward regulatory oversight, specifically through legal unbundling and Regulated Third-Party Access (rTPA), to mitigate market power risks and ensure fair market entry. The research concludes that policymakers must explicitly weigh the trade-offs between short-term investment certainty and long-term market efficiency to successfully leverage CCS in the climate transition. In the end, decision-making comes down to weighing public values against the identified governance solutions.