1. Introduction

Industrial-cluster decarbonisation governance refers to the legal, regulatory, institutional and economic arrangements through which geographically concentrated industrial facilities are collectively decarbonised. Carbon Capture, Utilisation and Storage (CCUS) hubs are a major model for this approach.

A CCUS hub normally connects multiple industrial emitters—such as steel, cement, chemicals, refineries, hydrogen plants and power facilities—to shared infrastructure for:

CO₂ capture at individual industrial facilities;

aggregation and conditioning of CO₂;

transport through pipelines, ships or other modes;

geological storage in offshore or onshore formations; and/or

utilisation of CO₂ in industrial processes or products.

The legal significance of the hub model is that the individual emitter is no longer the only regulated entity. Governance must coordinate emitters, pipeline operators, storage operators, regulators, local authorities, landowners, communities and government funding bodies.

The UK provides an important contemporary example. Its government identifies seven major industrial clusters that account for about 50% of UK industrial emissions and has pursued CCUS cluster sequencing to share transport and storage infrastructure. (GOV.UK)

2. Why Industrial Clusters Require Special Governance

Industrial decarbonisation differs from regulating a single factory because the infrastructure is interconnected.

For example:

Factory A → capture facility → gathering pipeline → shared CO₂ network → compressor → offshore pipeline → storage site

At the same time:

Factory B → capture facility → same gathering network → same storage system

This creates interdependence.

If Factory A fails to deliver CO₂ at the required quality, the network operator may suffer losses. Conversely, if the transport network becomes unavailable, several industrial emitters may be unable to operate their capture systems economically.

Consequently, CCUS governance must address cross-chain risks. The UK government expressly identifies such risks as situations in which the conduct or failure of one participant creates costs or negative effects for another participant. (GOV.UK)

3. Main Pillars of CCUS-Hub Governance

A. Cluster Planning

Government must determine:

which industrial areas qualify as clusters;

which emissions sources should be connected;

expected CO₂ volumes;

available transport corridors;

potential geological storage;

infrastructure capacity;

environmental constraints; and

expansion possibilities.

Cluster planning should ideally be based on long-term system planning rather than individual projects.

The UK industrial decarbonisation strategy illustrates this approach by identifying clusters around potential CO₂ injection points and recognising the economies of scale created by shared transport and storage infrastructure. (GOV.UK)

B. Regulation of CO₂ Capture

Capture facilities require regulatory approval concerning:

environmental emissions;

energy consumption;

water use;

chemicals and solvents;

waste;

occupational safety;

monitoring;

carbon accounting; and

compliance with emissions standards.

An important governance issue is that captured CO₂ should not automatically be treated as permanently abated merely because it has been captured.

Legal frameworks therefore need a complete chain of monitoring and verification.

4. CO₂ Transport Governance

Transport is one of the most legally complicated components of a CCUS hub.

A transport system may involve:

onshore pipelines;

offshore pipelines;

ships;

road transport;

rail;

intermediate storage terminals.

Questions include:

Ownership

Who owns the pipeline?

Access

Can additional industrial emitters obtain access to the network?

Pricing

How are transportation charges determined?

Capacity

Who receives priority when network capacity is limited?

Liability

Who is responsible if transported CO₂ escapes?

Technical standards

What CO₂ purity, pressure and temperature requirements apply?

These questions become particularly important because a shared CO₂ network can possess natural-monopoly characteristics.

The UK's Energy Act 2023 therefore establishes licensing requirements for CO₂ pipeline transportation and geological storage activities, recognising the monopolistic characteristics of these infrastructure assets. (Legislation.gov.uk)

5. Economic Regulation of CCUS Hubs

A CCUS hub may require substantial initial investment before sufficient emitters join the system.

This produces a coordination problem:

Emitters do not want to invest in capture facilities until transport and storage are available, while transport and storage developers do not want to invest until sufficient emitters commit to the network.

Government intervention can therefore include:

capital grants;

contracts for difference-type mechanisms;

tax incentives;

carbon-price support;

regulated network returns;

availability payments;

long-term contracts; and

public infrastructure investment.

The UK's framework attempts to solve this problem through separate business models for industrial capture and transport/storage infrastructure. (GOV.UK)

6. Open-Access and Third-Party Access

An important principle of cluster governance is non-discriminatory access.

Suppose a pipeline is initially designed for three large industrial facilities. Five years later, another cement factory wants to connect.

The legal system must determine:

whether the new emitter has a right to connect;

whether existing users can object;

who pays for expansion;

how connection charges are calculated;

whether the operator can reserve capacity; and

how disputes are resolved.

Without appropriate access rules, a CCUS hub could become a closed private infrastructure system.

The UK framework is developing network regulation and network codes for this purpose. The government states that a CCS Network Code has been developed and that the transport and storage networks are subject to economic regulation. (GOV.UK)

7. Storage-Site Governance

The final storage site creates long-term legal questions.

A storage regime should regulate:

site selection;

exploration;

geological characterisation;

storage permits;

injection rates;

monitoring;

leakage;

closure;

post-closure monitoring;

financial security; and

eventual transfer of liability.

The central question is:

Who remains legally responsible for stored CO₂ decades after injection stops?

Possible models include:

perpetual operator liability;

transfer of liability to government after a defined period;

conditional transfer following satisfactory monitoring; or

shared public-private liability.

This is particularly important because geological storage involves long-duration environmental risk.

8. Environmental Governance

CCUS does not eliminate environmental regulation.

A cluster can generate environmental impacts through:

construction;

pipeline installation;

compressor stations;

increased electricity consumption;

water consumption;

chemical solvents;

shipping;

offshore infrastructure;

disturbance of marine environments.

Therefore, CCUS projects may require:

environmental impact assessment;

planning approval;

emissions permits;

water permits;

marine licences;

habitat assessments;

pipeline safety approvals; and

consultation with affected communities.

The UK's Environment Agency has specifically examined environmental capacity for deploying carbon capture and hydrogen technologies in industrial clusters, including water availability, water quality and air-quality considerations. (GOV.UK)

9. Safety Regulation

CO₂ is not conventionally regarded as flammable, but concentrated CO₂ can create serious hazards because it can displace oxygen.

Accordingly, CCUS legislation needs to regulate:

pipeline integrity;

pressure;

fracture propagation;

emergency shutdown;

leak detection;

compressor safety;

separation distances;

emergency planning; and

worker protection.

UK safety regulation has continued to evolve. The 2026 CCUS-related regulations extend existing offshore installation and pipeline safety regimes to CCUS operations and CO₂ pipelines. (HSE)

10. Community Participation and Environmental Justice

Industrial clusters frequently exist near communities that have experienced decades of industrial activity.

CCUS governance therefore raises questions of:

procedural justice;

public consultation;

local economic benefits;

employment;

land acquisition;

health and safety;

environmental burdens;

indigenous rights where applicable; and

distribution of infrastructure benefits.

A technically successful CCUS project may nevertheless face opposition if affected communities believe that the costs and risks are being imposed locally while benefits are distributed elsewhere.

Research on UK CCS clusters has emphasised the importance of stakeholder networks, trust, communication and a social licence to operate. (DOI)

11. Liability Allocation

Liability is one of the most important legal issues in CCUS governance.

Consider a chain:

Emitter → Capture Operator → Transport Operator → Storage Operator

An accident can create uncertainty about which participant is responsible.

A comprehensive legal framework should distinguish:

Capture liability

Failure to properly capture or condition CO₂.

Transport liability

Pipeline leakage or transportation failure.

Storage liability

Migration or leakage from the geological formation.

Accounting liability

Incorrect measurement of captured and permanently stored CO₂.

Climate liability

Loss of claimed emissions reductions because stored CO₂ subsequently escapes.

Contracts should therefore contain:

indemnities;

warranties;

insurance requirements;

performance standards;

force-majeure clauses;

measurement provisions;

termination rights; and

dispute-resolution mechanisms.

12. Monitoring, Reporting and Verification

CCUS governance depends on reliable MRV—Monitoring, Reporting and Verification.

The system should measure:

CO₂ captured → CO₂ transported → CO₂ injected → CO₂ permanently stored

This prevents double counting.

For example, if a company claims that 1 million tonnes of CO₂ were permanently removed but only 800,000 tonnes reached verified storage, the legal system needs a mechanism to correct the claimed reduction.

India's NITI Aayog CCUS policy analysis similarly identifies monitoring, verification and accounting as important elements of a CCUS regulatory framework. (NITI Aayog)

13. Indian Legal Context

India does not yet have a comprehensive standalone CCUS statute comparable to a mature CO₂ transport-and-storage regulatory regime.

However, CCUS governance can potentially interact with existing frameworks concerning:

environmental protection;

industrial emissions;

environmental impact assessment;

hazardous substances;

pipelines;

mining and geology;

land acquisition;

offshore resources;

carbon markets;

energy regulation; and

corporate environmental responsibility.

The NITI Aayog CCUS policy framework is therefore particularly relevant.

It proposes a hub-and-cluster model for India and recommends mapping industrial clusters against suitable storage clusters. It also recognises that a phased cluster model can provide scalability instead of relying solely on point-to-point projects. (NITI Aayog)

The report further identifies the need to define the respective roles of:

emitters;

aggregators;

hub operators;

storage/disposal operators; and

CO₂ conversion/utilisation entities. (NITI Aayog)

This is significant because it demonstrates that CCUS governance is fundamentally an institutional-design problem, not merely a technological problem.

14. Important Case Laws and Judicial Decisions

CCUS-specific reported judicial decisions remain relatively limited because large-scale CCUS regulation is comparatively new. Consequently, cases concerning planning, environmental assessment, climate obligations and infrastructure governance are particularly useful.

1. R (on the application of Boswell) v Secretary of State for Energy Security and Net Zero [2024] EWHC 2128 (Admin)

This is one of the most directly relevant recent UK decisions.

The case concerned the Net Zero Teesside Power development, which involved:

a gas-fired generating station;

post-combustion carbon capture;

a CO₂ gathering pipeline network connecting industrial facilities on Teesside;

compression infrastructure; and

an offshore CO₂ export pipeline. (BAILII)

The case demonstrates that a CCUS hub can be legally assessed as an integrated infrastructure system, rather than simply as an isolated industrial installation.

Significance

The case is particularly useful for studying:

planning law;

climate-policy assessment;

integrated CCUS infrastructure;

administrative decision-making; and

the relationship between energy security and decarbonisation.

2. R (on the application of Finch) v Surrey County Council [2024] UKSC 20

The Supreme Court's decision concerning the Horse Hill oil development is important for environmental assessment principles.

The Court addressed whether downstream greenhouse-gas emissions associated with a project could fall within the environmental impact assessment required for that project.

Although this was not a CCUS case, its reasoning is relevant to industrial-cluster governance because decision-makers must carefully define the environmental consequences that belong within project-level assessment.

It provides a useful legal framework when considering whether the climate effects of connected infrastructure should be evaluated as part of a broader industrial system.

3. Verein KlimaSeniorinnen Schweiz v Switzerland (ECtHR, 2024)

The European Court of Human Rights examined state obligations concerning climate change and human rights.

Although the case did not concern CCUS specifically, it demonstrates the increasing importance of rights-based climate governance.

For industrial CCUS hubs, the broader implication is that climate policy cannot necessarily be separated from questions concerning:

environmental protection;

participation;

procedural rights; and

protection of individuals from serious environmental harm.

4. Urgenda Foundation v State of the Netherlands (Dutch Supreme Court, 2019)

Urgenda established an important judicial approach to governmental climate obligations under the European Convention on Human Rights framework.

Again, it was not a CCUS dispute.

Its relevance to industrial-cluster governance lies in the proposition that climate commitments can acquire legal significance beyond purely political policy statements.

5. Friends of the Earth Ltd v Heathrow Airport Ltd [2020] UKSC 52

The Supreme Court considered the relationship between major infrastructure development and climate-policy obligations.

The decision is relevant to CCUS because industrial-cluster infrastructure frequently involves major projects requiring planning consent.

The case demonstrates the importance of identifying the appropriate statutory policy framework when assessing infrastructure against climate objectives.

15. CCUS Hub Governance Model

A useful governance structure can be represented as:

Government

↓
Climate targets + funding + regulation

Independent economic/environmental regulators

↓
Licensing + pricing + environmental compliance

Cluster Authority / Hub Governance Body

↓
Coordination of industrial emitters

Capture Facilities

↓
CO₂ gathering network

Transport & Storage Operator

↓
Pipeline / shipping

Storage Site

↓
Monitoring + verification + long-term liability

Communities

↔ consultation + environmental justice + benefit sharing

This structure illustrates that the hub is effectively a multi-layer regulatory ecosystem.

16. Key Legal Problems

17. Major Governance Principle: Treat the Hub as One System

The most important conceptual principle is that CCUS infrastructure should be governed as a chain rather than as disconnected projects.

If capture is regulated independently from transportation, and transportation independently from storage, regulatory gaps can arise.

For example:

A capture operator may satisfy its individual permit while the transport network lacks sufficient capacity.

Or:

A storage operator may accept CO₂ without adequate information concerning its composition.

Therefore, governance should establish chain-wide standards covering:

Capture → Conditioning → Aggregation → Transport → Injection → Storage → Monitoring → Closure → Post-closure liability.

18. Future Direction

Industrial-cluster governance is likely to move towards:

regulated CO₂ transport networks;

interoperable network codes;

common technical specifications;

digital MRV;

shared storage infrastructure;

cross-border CO₂ transportation;

long-term liability frameworks;

public-private financing;

carbon-market integration;

industrial decarbonisation contracts; and

regional environmental-governance institutions.

The UK's current framework illustrates this transition: its Energy Act 2023 provides a legislative foundation for economic regulation of CO₂ transport and storage, while Ofgem now regulates these networks. (GOV.UK)

19. Conclusion

Industrial Clusters Decarbonisation Governance through CCUS hubs is fundamentally a problem of coordinated infrastructure regulation.

The law must simultaneously address climate targets, environmental protection, infrastructure planning, monopoly regulation, third-party access, safety, liability, MRV, community participation and investment incentives.

The UK provides an especially developed example of this approach. Its cluster-sequencing policy is designed around shared transport and storage infrastructure, while the Energy Act 2023 provides licensing and economic-regulation mechanisms for CO₂ networks. (GOV.UK)

For India, the hub-and-cluster concept identified by NITI Aayog offers a potential institutional model: industrial emitters can be connected to common CO₂ transportation and storage infrastructure while regulatory responsibilities are divided among emitters, aggregators, hub operators and storage entities. (NITI Aayog)

The central legal lesson is therefore:

A successful CCUS hub requires regulation of the entire carbon-management chain, not merely permission for individual capture projects.

Selected authorities

R (Boswell) v Secretary of State for Energy Security and Net Zero [2024] EWHC 2128 (Admin) — integrated CCUS/Teesside infrastructure. (BAILII)

R (Finch) v Surrey County Council [2024] UKSC 20 — environmental assessment and greenhouse-gas consequences.

Friends of the Earth Ltd v Heathrow Airport Ltd [2020] UKSC 52 — major infrastructure and climate-policy framework.

Urgenda Foundation v State of the Netherlands (2019) — governmental climate obligations.

Verein KlimaSeniorinnen Schweiz v Switzerland (ECtHR, 2024) — climate change and human-rights obligations.

UK Energy Act 2023 — licensing and economic regulation of CO₂ transport and storage. (Legislation.gov.uk)

NITI Aayog, Carbon Capture, Utilisation and Storage: Policy Framework and Deployment Mechanism in India — proposed Indian CCUS hub-and-cluster framework. (NITI Aayog)