UK Energy Act 2023 (CCUS Economic Regulation)

Policy Overview

The Energy Act 2023 is the primary legislative engine for the UK’s energy transition, providing the robust legal framework needed to reach Net Zero by 2050. For the CCUS sector, it establishes a world-first Economic Regulation model for Transport and Storage (T&S). The Act designates Ofgem as the independent economic regulator for CO2 networks, applying a Regulated Asset Base (RAB) model. This ensures that infrastructure operators can earn a predictable, regulated return on their investments, similar to traditional gas and electricity grids.

Furthermore, the Act formalizes the statutory basis for ‘Revenue Support Contracts’, enabling the government to issue long-term Contracts for Difference (CfDs) to carbon capture facilities. With the HyNet and East Coast clusters reaching Financial Close in late 2024, the Act is now being actively enforced to build out the nation’s 2030 CCUS vision. By turning high-risk infrastructure into stable, bankable utility-style assets, the UK has created one of the most attractive regulatory environments globally for carbon management capital.