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UK CCUS non‑pipeline CO2 transport: DESNZ consultation proposes capture‑contract funding, throughput‑only fees, no NPT licence, and project‑borne cross‑chain risk; open access regime pending

Published on: 03 March 2026

Published by a LexisNexis Energy expert
Legal News
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Article summary

What is the rationale for CCUS NPT policy development?

DESNZ outlines clear reasons for intervening in NPT, highlighting obstacles that prevent the market from delivering alone:

  • price and revenue market failures (CCUS costs outstrip the prevailing carbon price and likely receipts, with weak revenue certainty and insufficient demand pull for low‑carbon products)
  • co‑ordination failures spanning multi‑party value chains
  • first‑mover disadvantages driven by high upfront expenditure and technology/market risk
  • the need to recognise unpriced positive externalities (‘societal spill‑overs’) arising from CCUS deployment

DESNZ concedes that existing capture business models and the T&S Regulatory Investment (‘TRI’) model were chiefly conceived for pipeline transport (rather than NPT) and for permanent geological storage (not intermediate or above‑ground storage). Industry feedback has stressed that full‑chain NPT costs remain a significant brake on investment, requiring tailored NPT support. DESNZ’s objective is to create sufficient policy certainty for NPT projects to progress, while steadily scaling back direct government intervention...

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