Evolution of economic regulation for CO2 storage Grant

DESNZ

About this grant

This was a UK government call for evidence on the evolution of economic regulation for CO2 storage, issued by the Department for Energy Security and Net Zero (DESNZ). The call sought views and evidence on whether alternative forms of economic regulation for CO2 storage are appropriate as the carbon capture, usage and storage (CCUS) market transitions towards a self-sustaining market. It examined whether the Regulated Asset Base (RAB) model will continue to best meet the needs of users, developers, investors, and consumers as the CCS market matures, while supporting the UK's Carbon Budgets and net zero goals. The call for evidence focused on three key areas: Economic Regulation and Natural Monopolies; Competition and Storage Costs; and Investment, including Equity and Debt Considerations. The government and Ofgem intended to use responses to inform policy development and decisions on options for future forms of economic regulation to support continued growth and deployment of offshore CO2 storage in the UK. This is not a grant funding programme — it is a consultation/call for evidence. The call ran from 10am on 6 August 2025 to 11:59pm on 31 October 2025, and a summary of responses was published on 27 April 2026. 26 responses were received, primarily from transport and storage companies, trade associations, and capture projects.

Eligibility

This was a call for evidence open to anyone with an interest in the policy area. It was 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); consumers whose interests may be impacted; current and future CO2 storage developers and infrastructure providers; those intending to finance the development of CO2 storage sites including prospective investors or investment bodies; and trade bodies, academics and think tanks.

Key requirements

• ✓Provide views and evidence on economic regulation for CO2 storage
• ✓Support policy development for CCUS sector growth
• ✓Demonstrate expertise in carbon capture, usage, storage, or related regulatory/economic frameworks

Relevant sectors

About this sector

Carbon capture funding backs capture at industrial and power sites, transport networks and geological storage. Public support usually targets clusters where capture, pipelines and storage are developed together. Tenders buy studies, equipment and storage appraisal. Calls expect a clear storage route, engineering maturity and partners across the chain.