Carbon Storage Levy To Be Introduced In The UK

‘User Pays’ Carbon Storage Levy To Be Introduced In UK Once Market Is Self-Sustainable - Carbon Herald

Accorrding to a report in Offshore Energy, the governing body in charge of carbon storage in the UK plans to introduce a levy on the companies using them. The North Sea Transition Authority (NSTA) has been consulting with industry on how to formulate and enact a “user pays” model

The move aims to provide clarity in terms of costs for emitters looking to draw their own financial plans, as well as investors willing to support the carbon capture industry.

Respondents to a survey from the NSTA – oil and gas companies, as well as the Carbon Capture and Storage Association – agreed that a model similar to what is in place for petroleum projects would be suitable here as well.

According to this mechanism the levy would reflect actual costs and would have different rates for projects at different phases. Respondents also agreed that the rolling out of the levy should be synchronized with the carbon capture industry’s evolution into one that operates on a market basis, rather than being solely reliant on government funding.

Relevant: UK Proposes Including Carbon Removal In ETS

In 2023 the UK Government set aside £20 billion ($25.5 billion) in investment for carbon capture. The NSTA also awarded its first batch of licences for carbon storage, along with the first phase of the so-called Track 1 and 2 projects which accepted its first applications.

Relevant: UK Launches Call For Evidence To Explore CO2 Transport Options

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