Evolution of Economic Regulation for CO2 Storage
This consultation is open for responses
Respond to this consultationSummary
DESNZ opens consultation on economic regulation of CO2 storage infrastructure, questioning whether the existing Regulated Asset Base model remains appropriate as carbon capture markets mature. The consultation examines natural monopoly characteristics, competition mechanisms, and investment incentives for offshore CO2 storage.
Key facts
- •Consultation published 6 August 2025
- •Focuses on RAB model for CO2 storage
- •Covers offshore CO2 storage specifically
Related programmes
Memo
To maintain investment and continue development of CO2 stores, we would like to consider whether alternative forms of economic regulation for CO2 storage are appropriate as the market transitions towards a self-sustaining market. This call for evidence investigates whether the Regulated Asset Base (RAB) model of economic regulation for CO2 storage will continue to best meet the needs of users, developers, investors, and consumers as the CCS market matures; whilst also supporting the UK’s Carbon Budgets and net zero. We are seeking views and evidence on elements of economic regulatory regime for CO2 storage in these key areas: 1. Economic Regulation and Natural Monopolies 2. Competition and Storage Costs 3. Investment: Equity and Debt Considerations Following the call for evidence closing, government and Ofgem will assess the responses received and provide a summary. We will use the information gathered to inform policy development and decisions on options for future economic regulation to support continued growth and deployment of offshore CO2 storage.