Evolving Regulation for CO₂ Storage: A Call for Evidence from Ofgem

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 to Amineh Farasatmand for her contribution in preparing this blog.