diff --git a/config.default.yaml b/config.default.yaml
index ec7dc399..747e8023 100644
--- a/config.default.yaml
+++ b/config.default.yaml
@@ -223,7 +223,8 @@ sector:
   co2_vent: true
   SMR: true
   co2_sequestration_potential: 200  #MtCO2/a sequestration potential for Europe
-  co2_sequestration_cost: 20   #EUR/tCO2 for transport and sequestration of CO2
+  co2_sequestration_cost: 10   #EUR/tCO2 for sequestration of CO2
+  co2_network: false
   cc_fraction: 0.9  # default fraction of CO2 captured with post-combustion capture
   hydrogen_underground_storage: true
   use_fischer_tropsch_waste_heat: true
@@ -467,6 +468,7 @@ plotting:
     hot water storage: '#BBBBBB'
     hot water charging: '#BBBBBB'
     hot water discharging: '#999999'
+    CO2 pipeline: '#999999'
     CHP: r
     CHP heat: r
     CHP electric: r
diff --git a/doc/release_notes.rst b/doc/release_notes.rst
index 4de40f06..f838544c 100644
--- a/doc/release_notes.rst
+++ b/doc/release_notes.rst
@@ -62,6 +62,14 @@ Future release
   These are included in the environment specifications of PyPSA-Eur.
 * Consistent use of ``__main__`` block and further unspecific code cleaning.
 * Distinguish costs for home battery storage and inverter from utility-scale battery costs.
+* Add option to regionally resolve CO2 storage and add CO2 pipeline transport because geological storage potential,
+  CO2 utilisation sites and CO2 capture sites may be separated.
+  The CO2 network is built from zero based on the topology of the electricity grid (greenfield).
+  Pipelines are assumed to be bidirectional and lossless.
+  Furthermore, neither retrofitting of natural gas pipelines (required pressures are too high, 80-160 bar vs <80 bar)
+  nor other modes of CO2 transport (by ship, road or rail) are considered.
+  The regional representation of CO2 is activated with the config setting ``sector: co2_network: true`` but is deactivated by default.
+  The global limit for CO2 sequestration now applies to the sum of all CO2 stores via an ``extra_functionality`` constraint.
 * Added option for hydrogen liquefaction costs for hydrogen demand in shipping.
   This introduces a new ``H2 liquid`` bus at each location.
   It is activated via ``sector: shipping_hydrogen_liquefaction: true``.
diff --git a/doc/spatial_resolution.rst b/doc/spatial_resolution.rst
index 1be9f3ad..13e94543 100644
--- a/doc/spatial_resolution.rst
+++ b/doc/spatial_resolution.rst
@@ -48,7 +48,7 @@ Solid biomass:  single node for Europe, until transport costs can be
 incorporated.
 
 CO2:  single node for Europe, but a transport and storage cost is added for
-sequestered CO2.
+sequestered CO2. Optionally: nodal, with CO2 transport via pipelines.
 
 Liquid hydrocarbons: single node for Europe, since transport costs for
 liquids are low.
diff --git a/scripts/prepare_sector_network.py b/scripts/prepare_sector_network.py
index ef6845fc..36d9aec7 100644
--- a/scripts/prepare_sector_network.py
+++ b/scripts/prepare_sector_network.py
@@ -19,6 +19,37 @@ from helper import override_component_attrs
 import logging
 logger = logging.getLogger(__name__)
 
+from types import SimpleNamespace
+spatial = SimpleNamespace()
+
+
+def define_spatial(nodes):
+    """
+    Namespace for spatial
+    
+    Parameters
+    ----------
+    nodes : list-like
+    """
+    
+    global spatial
+    global options
+    
+    spatial.nodes = nodes
+    
+    spatial.co2 = SimpleNamespace()
+    
+    if options["co2_network"]:
+        spatial.co2.nodes = nodes + " co2 stored"
+        spatial.co2.locations = nodes
+        spatial.co2.vents = nodes + " co2 vent"
+    else:
+        spatial.co2.nodes = ["co2 stored"]
+        spatial.co2.locations = ["EU"]
+        spatial.co2.vents = ["co2 vent"]
+
+    spatial.co2.df = pd.DataFrame(vars(spatial.co2), index=nodes)
+
 
 def emission_sectors_from_opts(opts):
 
@@ -54,6 +85,40 @@ def get(item, investment_year=None):
         return item
 
 
+def create_network_topology(n, prefix, connector=" -> "):
+    """
+    Create a network topology like the power transmission network.
+    
+    Parameters
+    ----------
+    n : pypsa.Network
+    prefix : str
+    connector : str
+        
+    Returns
+    -------
+    pd.DataFrame with columns bus0, bus1 and length
+    """
+
+    ln_attrs = ["bus0", "bus1", "length"]
+    lk_attrs = ["bus0", "bus1", "length", "underwater_fraction"]
+
+    candidates = pd.concat([
+        n.lines[ln_attrs],
+        n.links.loc[n.links.carrier == "DC", lk_attrs]
+    ]).fillna(0)
+
+    positive_order = candidates.bus0 < candidates.bus1
+    candidates_p = candidates[positive_order]
+    swap_buses = {"bus0": "bus1", "bus1": "bus0"}
+    candidates_n = candidates[~positive_order].rename(columns=swap_buses)
+    candidates = pd.concat([candidates_p, candidates_n])
+
+    topo = candidates.groupby(["bus0", "bus1"], as_index=False).mean()
+    topo.index = topo.apply(lambda c: prefix + c.bus0 + connector + c.bus1, axis=1)
+    return topo
+
+
 def co2_emissions_year(countries, opts, year):
     """
     Calculate CO2 emissions in one specific year (e.g. 1990 or 2018).
@@ -299,26 +364,26 @@ def add_co2_tracking(n, options):
     )
 
     # this tracks CO2 stored, e.g. underground
-    n.add("Bus",
-        "co2 stored",
-        location="EU",
+    n.madd("Bus",
+        spatial.co2.nodes,
+        location=spatial.co2.locations,
         carrier="co2 stored"
     )
 
-    n.add("Store",
-        "co2 stored",
+    n.madd("Store",
+        spatial.co2.nodes,
         e_nom_extendable=True,
-        e_nom_max=options['co2_sequestration_potential'] * 1e6,
+        e_nom_max=np.inf, 
         capital_cost=options['co2_sequestration_cost'],
         carrier="co2 stored",
-        bus="co2 stored"
+        bus=spatial.co2.nodes
     )
 
     if options['co2_vent']:
 
-        n.add("Link",
-            "co2 vent",
-            bus0="co2 stored",
+        n.madd("Link",
+            spatial.co2.vents,
+            bus0=spatial.co2.nodes,
             bus1="co2 atmosphere",
             carrier="co2 vent",
             efficiency=1.,
@@ -326,6 +391,28 @@ def add_co2_tracking(n, options):
         )
 
 
+def add_co2_network(n, costs):
+    
+    logger.info("Adding CO2 network.")
+    co2_links = create_network_topology(n, "CO2 pipeline ")
+
+    cost_onshore = (1 - co2_links.underwater_fraction) * costs.at['CO2 pipeline', 'fixed'] * co2_links.length
+    cost_submarine = co2_links.underwater_fraction * costs.at['CO2 submarine pipeline', 'fixed'] * co2_links.length
+    capital_cost = cost_onshore + cost_submarine
+    
+    n.madd("Link",
+        co2_links.index,
+        bus0=co2_links.bus0.values + " co2 stored",
+        bus1=co2_links.bus1.values + " co2 stored",
+        p_min_pu=-1,
+        p_nom_extendable=True,
+        length=co2_links.length.values,
+        capital_cost=capital_cost.values,
+        carrier="CO2 pipeline",
+        lifetime=costs.at['CO2 pipeline', 'lifetime']
+    )
+
+
 def add_dac(n, costs):
 
     heat_carriers = ["urban central heat", "services urban decentral heat"]
@@ -339,7 +426,7 @@ def add_dac(n, costs):
         locations,
         suffix=" DAC",
         bus0="co2 atmosphere",
-        bus1="co2 stored",
+        bus1=spatial.co2.df.loc[locations, "nodes"].values,
         bus2=locations.values,
         bus3=heat_buses,
         carrier="DAC",
@@ -990,10 +1077,11 @@ def add_storage(n, costs):
     if options['methanation']:
 
         n.madd("Link",
-            nodes + " Sabatier",
+            spatial.nodes,
+            suffix=" Sabatier",
             bus0=nodes + " H2",
             bus1="EU gas",
-            bus2="co2 stored",
+            bus2=spatial.co2.nodes,
             p_nom_extendable=True,
             carrier="Sabatier",
             efficiency=costs.at["methanation", "efficiency"],
@@ -1005,10 +1093,11 @@ def add_storage(n, costs):
     if options['helmeth']:
 
         n.madd("Link",
-            nodes + " helmeth",
+            spatial.nodes,
+            suffix=" helmeth",
             bus0=nodes,
             bus1="EU gas",
-            bus2="co2 stored",
+            bus2=spatial.co2.nodes,
             carrier="helmeth",
             p_nom_extendable=True,
             efficiency=costs.at["helmeth", "efficiency"],
@@ -1021,11 +1110,12 @@ def add_storage(n, costs):
     if options['SMR']:
 
         n.madd("Link",
-            nodes + " SMR CC",
+            spatial.nodes,
+            suffix=" SMR CC",
             bus0="EU gas",
             bus1=nodes + " H2",
             bus2="co2 atmosphere",
-            bus3="co2 stored",
+            bus3=spatial.co2.nodes,
             p_nom_extendable=True,
             carrier="SMR CC",
             efficiency=costs.at["SMR CC", "efficiency"],
@@ -1374,7 +1464,7 @@ def add_heat(n, costs):
                 bus1=nodes[name],
                 bus2=nodes[name] + " urban central heat",
                 bus3="co2 atmosphere",
-                bus4="co2 stored",
+                bus4=spatial.co2.df.loc[nodes[name], "nodes"].values,
                 carrier="urban central gas CHP CC",
                 p_nom_extendable=True,
                 capital_cost=costs.at['central gas CHP', 'fixed']*costs.at['central gas CHP', 'efficiency'] + costs.at['biomass CHP capture', 'fixed']*costs.at['gas', 'CO2 intensity'],
@@ -1607,7 +1697,7 @@ def add_biomass(n, costs):
             bus1=urban_central,
             bus2=urban_central + " urban central heat",
             bus3="co2 atmosphere",
-            bus4="co2 stored",
+            bus4=spatial.co2.df.loc[urban_central, "nodes"].values,
             carrier="urban central solid biomass CHP CC",
             p_nom_extendable=True,
             capital_cost=costs.at[key, 'fixed'] * costs.at[key, 'efficiency'] + costs.at['biomass CHP capture', 'fixed'] * costs.at['solid biomass', 'CO2 intensity'],
@@ -1653,12 +1743,13 @@ def add_industry(n, costs):
         efficiency=1.
     )
 
-    n.add("Link",
-        "solid biomass for industry CC",
+    n.madd("Link",
+        spatial.co2.locations,
+        suffix=" solid biomass for industry CC",
         bus0="EU solid biomass",
         bus1="solid biomass for industry",
         bus2="co2 atmosphere",
-        bus3="co2 stored",
+        bus3=spatial.co2.nodes,
         carrier="solid biomass for industry CC",
         p_nom_extendable=True,
         capital_cost=costs.at["cement capture", "fixed"] * costs.at['solid biomass', 'CO2 intensity'],
@@ -1691,12 +1782,13 @@ def add_industry(n, costs):
         efficiency2=costs.at['gas', 'CO2 intensity']
     )
 
-    n.add("Link",
-        "gas for industry CC",
+    n.madd("Link",
+        spatial.co2.locations,
+        suffix=" gas for industry CC",
         bus0="EU gas",
         bus1="gas for industry",
         bus2="co2 atmosphere",
-        bus3="co2 stored",
+        bus3=spatial.co2.nodes,
         carrier="gas for industry CC",
         p_nom_extendable=True,
         capital_cost=costs.at["cement capture", "fixed"] * costs.at['gas', 'CO2 intensity'],
@@ -1827,7 +1919,7 @@ def add_industry(n, costs):
         nodes + " Fischer-Tropsch",
         bus0=nodes + " H2",
         bus1="EU oil",
-        bus2="co2 stored",
+        bus2=spatial.co2.nodes,
         carrier="Fischer-Tropsch",
         efficiency=costs.at["Fischer-Tropsch", 'efficiency'],
         capital_cost=costs.at["Fischer-Tropsch", 'fixed'],
@@ -1916,11 +2008,12 @@ def add_industry(n, costs):
     )
 
     #assume enough local waste heat for CC
-    n.add("Link",
-        "process emissions CC",
+    n.madd("Link",
+        spatial.co2.locations,
+        suffix=" process emissions CC",
         bus0="process emissions",
         bus1="co2 atmosphere",
-        bus2="co2 stored",
+        bus2=spatial.co2.nodes,
         carrier="process emissions CC",
         p_nom_extendable=True,
         capital_cost=costs.at["cement capture", "fixed"],
@@ -2039,6 +2132,8 @@ if __name__ == "__main__":
 
     patch_electricity_network(n)
 
+    define_spatial(pop_layout.index)
+
     if snakemake.config["foresight"] == 'myopic':
 
         add_lifetime_wind_solar(n, costs)
@@ -2091,6 +2186,9 @@ if __name__ == "__main__":
     if "noH2network" in opts:
         remove_h2_network(n)
 
+    if options["co2_network"]:
+        add_co2_network(n, costs)
+
     for o in opts:
         m = re.match(r'^\d+h$', o, re.IGNORECASE)
         if m is not None:
diff --git a/scripts/solve_network.py b/scripts/solve_network.py
index a46acc30..9534a123 100644
--- a/scripts/solve_network.py
+++ b/scripts/solve_network.py
@@ -3,6 +3,7 @@
 import pypsa
 
 import numpy as np
+import pandas as pd
 
 from pypsa.linopt import get_var, linexpr, define_constraints
 
@@ -150,8 +151,26 @@ def add_chp_constraints(n):
         define_constraints(n, lhs, "<=", 0, 'chplink', 'backpressure')
 
 
+def add_co2_sequestration_limit(n, sns):
+    
+    co2_stores = n.stores.loc[n.stores.carrier=='co2 stored'].index
+
+    if co2_stores.empty or ('Store', 'e') not in n.variables.index:
+        return
+    
+    vars_final_co2_stored = get_var(n, 'Store', 'e').loc[sns[-1], co2_stores]
+    
+    lhs = linexpr((1, vars_final_co2_stored)).sum()
+    rhs = n.config["sector"].get("co2_sequestration_potential", 200) * 1e6
+    
+    name = 'co2_sequestration_limit'
+    define_constraints(n, lhs, "<=", rhs, 'GlobalConstraint',
+                       'mu', axes=pd.Index([name]), spec=name)
+
+
 def extra_functionality(n, snapshots):
     add_battery_constraints(n)
+    add_co2_sequestration_limit(n, snapshots)
 
 
 def solve_network(n, config, opts='', **kwargs):