Evolution of economic regulation for CO2 storage
Read the full outcome
Detail of outcome
The response to the call for evidence on evolved forms of economic regulation for CO2 storage represents a factual summary of responses received during the call for evidence.
Key themes that emerged from the responses:
- CO2 storage will function as a natural monopoly in the early market, due to high capital costs, geographical constraints, and cross-chain risks. While many respondents believe these characteristics could ease over time, a third of respondents believe monopoly conditions will persist even as the market matures
- the Regulated Asset Base (RAB) model is seen as essential for early CO2 storage development, but there was consensus amongst respondents that it will need to evolve as the market matures
- moving away from the RAB model for CO2 storage carries both risks and benefits, with respondent’s noting that any transition must be evidence-based and carefully sequenced
- competition in the CO2 storage market is possible but is a long-term prospect and creates value only in a mature market
- transitional government support and risk sharing mechanisms are viewed as necessary to build investor confidence
- clear and predictable regulatory frameworks are essential for unlocking investment and efficient financing
Detail of feedback received
We received 26 responses to the call for evidence from a range of stakeholders which we have summarised in this document. The largest groups included:
- 11 transport and storage companies
- 6 trade associations and industry bodies
- 5 capture projects and prospective network users
Next steps
Government and Ofgem will use the information gathered to inform policy development and decisions on economic regulation to support continued growth of offshore CO2 storage. We will maintain close collaboration with industry, ensuring ongoing dialogue shapes effective and inclusive approaches.
Original call for evidence
Call for evidence description
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:
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Economic Regulation and Natural Monopolies
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Competition and Storage Costs
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Investment: Equity and Debt Considerations
Following the call for evidence closing on 31 October 2025, 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 forms of economic regulation to support continued growth and deployment of offshore CO2 storage.
We welcome responses from anyone with an interest in the policy area. We envisage that this call for evidence will be of particular interest to:
- those intending to use UK CO2 storage services for domestic and international storage of CO2 including CO2 capture facilities and transport providers
- any consumers whose interests may be impacted
- current and future CO2 storage developers and infrastructure providers
- those intending to finance the development of a CO2 storage site including prospective investors or investment bodies
- trade bodies, academics and think tanks
Read our consultation privacy notice.
Documents
Updates to this page
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Published summary of responses.
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First published.
Update history
2026-04-27 12:00
Published summary of responses.
2025-08-06 10:00
First published.