Optimizing cross-border CCS policy: an integrated energy–carbon–cost framework for source–host credit allocation

Cross-border carbon capture and storage (CCS) can support industrial decarbonisation where emissions and storage resources are unevenly distributed. Existing optimisation studies mainly minimise techno-economic cost and rarely integrate energy penalties, country-level emissions accounting, domestic-versus-export allocation, and source–host credit sharing. This study develops a mixed-integer linear programming framework that selects domestic or export storage, shipping routes, offshore pipelines, and sinks while tracking operational emissions, costs, and source–host credit allocation. An anonymised Japan–Malaysia case includes two Japanese sources, two Malaysian sinks, and a domestic screening pathway. Domestic Japanese storage costs USD 0.327 billion/year, compared with USD 0.484 billion/year for full export. Under the Combined Competitiveness scenario, a combination of a lower Malaysian service fee, equal source–host credit sharing, and an upper-end published domestic-storage cost selects full export to MY-Sink 1 at USD 0.426 billion/year, with the capability of storing 2.674 MtCO2/year after shipping loss. Credit ownership changes economic and national accounting outcomes without changing routing. Malaysian storage and injection, shipping, and credit values give the largest local sensitivity responses. In summary, the framework provides a transparent method for assessing cross-border CCS competitiveness, operational emissions, and sink selection.