Why CO₂ Pipelines Are Suddenly in High Demand

CO₂ pipelines are becoming increasingly important assets as incentives and demand align. Policy durability and permitting will shape how fast the market scales

5 Feb 2026

The US carbon capture industry is picking up speed, and an unglamorous piece of infrastructure is moving to center stage. CO₂ pipelines, long treated as a future necessity, are now becoming strategic assets as companies scramble to secure transport capacity for captured emissions.

The shift from theory to execution is already visible. ExxonMobil’s acquisition of Denbury delivered control of the largest CO₂ pipeline network in the country, spanning more than a thousand miles. The deal spared ExxonMobil years of permitting and construction while instantly expanding its ability to move carbon at scale. For many analysts, it marked a turning point. Carbon capture was no longer just about regulatory compliance. It was starting to look like a durable business.

“This is about speed and certainty,” said an energy transition analyst at a US consultancy. “If you own the pipeline, you remove one of the biggest bottlenecks. That makes large projects easier to finance and far more realistic.”

Policy support has helped sharpen the focus. Enhanced federal tax credits have improved project economics, drawing in manufacturers, ethanol producers, and power generators that once sat on the sidelines. Still, developers know incentives alone are not enough. The pace of permitting and the durability of policy will continue to shape investment decisions.

For moving large volumes of CO₂ to permanent storage, pipelines remain the most practical option. This is especially true in the Midwest and along the Gulf Coast, where geology suitable for storage is well understood. Midstream operators see familiar terrain. Kinder Morgan, for example, has flagged carbon transport as a growing line of business, pointing to long-term contracts and fee structures that mirror traditional pipelines.

Challenges remain. Some projects have run into community opposition, land access disputes, and tangled state permitting processes. In response, developers are engaging landowners earlier and designing shared pipelines that serve multiple customers, cutting costs and reducing disruption.

Tallgrass’s recent progress on a multistate pipeline, anchored by confirmed customer demand and early stakeholder engagement, is widely seen as a sign of a maturing sector.

The direction is clear even if the path is not. As major players buy assets, smaller firms partner up, and policymakers continue to back carbon capture, CO₂ pipelines are gaining strategic weight. Their future will hinge on execution and policy stability, but they are fast becoming essential infrastructure in a low-carbon economy.