On 6 August 2025 the UK Government and Ofgem, launched a Call for Evidence to explore how economic regulation for CO₂ storage should evolve as the Carbon Capture, Usage and Storage sector matures. As the CO₂ storage market transitions from early-stage development to a more self-sustaining model, the government is evaluating whether the current Regulated Asset Base model remains fit for purpose. This consultation seeks input on whether alternative regulatory approaches might better serve:
- Users of CO₂ storage services;
- Consumers impacted by storage costs;
- CO2 storage developers and infrastructure providers; and
- Investors and financiers of CO2 storage sites.
Therefore, the government is inviting public feedback, including CO₂ capture and transport providers both domestic and international, current and prospective CO₂ storage developers, investors and financial institutions.
Key areas of focus of the economic regulatory regime for CO2 storage will be:
- Economic Regulation and Natural Monopolies
- Competition and Storage Costs
- Equity and Debt Investment Considerations
After the call for evidence closes on 31 October 2025, DESNZ and Ofgem will review the feedback and publish a summary in early 2026. The insights gathered will help shape future policy, and a formal consultation on proposed changes will follow.
With appreciation toAmineh Farasatmandfor her contribution in preparing this blog.
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