The Right Track: Advancing CO2 Transport by Rail

Advancing the deployment of carbon management requires more than a 100-fold expansion of transport infrastructure. Historically, pipeline has dominated the conversation around transport because of its ability to transport large volumes of CO2 at low costs. 

Pipelines are indeed a necessary component of any strategic vision for CO2 transport, but the increasing difficulty in approving and constructing new pipelines in the U.S is undeniably evident today. The associated delays and countless cancellations have in turn led to the abandonment of critical carbon management initiatives. Fortunately, the low-cost transport of large material volumes is not limited to pipeline alone—what about rail?

The rail industry has safely transported CO2 for decades: an estimated 1.2 million tons of liquified CO2 annually. Rail has a notably low incident rate regarding CO2 release during transport and, due to the relatively low volumes moved per tanker (on average, 80 to 90 tons of CO2 potentially released per tanker) , rail has a demonstrated safety record ideal for communities concerned about bearing the risk of CO2 transport.

Communities along transport corridors can also benefit from rail transport through greater job creation opportunities. This is critical when considering the economic hardship in many energy communities, burdened by the closure of coal-fired power plants and associated mining and employment. However, beyond job creation, project developers must understand their responsibility in proactively engaging with these communities to understand concerns and co-develop deployment strategies that work for both sides.

This decline in coal demand presents a unique opportunity to repurpose rail for CO2 transport: more coal is moved by rail in the U.S. today than any other commodity. An estimated 100 million tons of CO2 could be moved annually by 2050, helping replacing lost coal freight movement.

Pipeline has traditionally dominated the discussion (and existing CO2 transport markets), providing cost-savings associated with large volumes. However, recent analysis has found that for smaller volumes of CO2—less than 2 million tons, and certainly under 1 million tons—the economic parity gap between pipeline and other modes like rail narrows quickly.

Rail transport can be cost-competitive, for the short to medium distances that typically link many potential sources of CO2 capture with viable storage basins. It is critical to realize this in context of the immediate future of carbon management: most projects in development or likely to be proposed over the next decade will fall in the range of volumes where rail—not pipeline (or trucking)—is the least-cost option for transport.

A key advantage of using rail lies in the use of existing infrastructure. This not only liberates valuable resources for use in other areas of climate mitigation, but also bypasses potentially tenuous right-of-way securing required by pipeline. In hard-to-abate sectors like cement, steel, and natural gas, 94% of facilities are within a 1-mile range of a railroad and translate to the smaller-scale projects that will dominate the next decade of deployment in carbon management.

In the Midwest Ethanol Corridor, corn ethanol facilities are connected by small railroads that deliver feed directly to the facilities. In the same region, the permit of a $5.5 billion carbon dioxide pipeline project, spanning 5,000 miles over five states, was denied at the end of 2023, a theme repeated across the Midwest with all three of the region’s proposed pipeline projects being shut down.

While the rail industry is mature, to reach meaningful adoption for U.S. climate goals, it must prove as a reliable and scalable transport method for CO2. Here, the government plays a crucial role in derisking and deploying first-of-a-kind projects, as evidenced by the DOE’s Office of Carbon Management.

The passage of the 2022 Inflation Reduction Act allocated $27 million in funding specifically for carbon transport, resulting in a funding opportunity announcement (FOA) for front-end engineering (FEED) studies to support and accelerate the planning for CO2 transport (limited in scope to pipeline projects) in September 2022. However, in September of 2023, the FOA was revised to include rail, among other transport methods. The government could also assist in subsidizing costs in tanker equipment and accelerating the build-out of other key elements of the rail supply chain.

Experience consistently underscores that there are no “silver bullet” solutions to address climate challenges. Rail transport has a meaningful and complementary role in carbon management supply chain logistics and, under the right conditions, it should be considered the first option for CO2 transport—not a backup plan.

Alina Ho

Student Advisory Council Member

Alina Ho is an undergraduate student studying systems science and engineering in the School of Engineering and Applied Sciences. Ho was a 2022 Undergraduate Student Fellow and is a Kleinman Center Student Advisory Council Member.