Energy Act 2023

92 Financing of costs of decommissioning etc U.K.

(1) The Secretary of State may by regulations make provision for requiring relevant persons to provide security for the performance of obligations relating to the future abandonment or decommissioning of carbon dioxide-related sites, pipelines or installations.

(2) For the purposes of subsection (1) an installation, site or pipeline is “carbon dioxide-related” if it is, or is to be, used for a purpose related to the geological storage, or transportation, of carbon dioxide.

(3) In this section references to an installation, site or pipeline include one that is located in, under or over—

(a) the territorial sea adjacent to the United Kingdom, or

(b) waters in a Gas Importation and Storage Zone (within the meaning given by section 1 of the Energy Act 2008).

(4) The following provisions of this section are without prejudice to the generality of subsection (1).

(5) In this section “relevant person” means a person who—

(a) holds a licence under section 7, or

(b) is a person to whom a notice has been, or may be, given under section 29 of the Petroleum Act 1998 (preparation of abandonment programmes) in respect of a carbon storage installation.

(6) Regulations under subsection (1) may—

(a) require relevant persons to provide the Secretary of State with estimates of costs that are likely to be incurred in connection with obligations such as are mentioned in subsection (1) (“decommissioning costs”);

(b) make provision about the estimation of decommissioning costs and about the manner in which such estimates are to be verified (which may include provision requiring verification by an independent third party);

(c) require relevant persons to review estimates of decommissioning costs at times, or at intervals, specified in the regulations;

(d) make provision about the approval by the Secretary of State of estimates of such costs;

(e) provide for information specified, or of a description specified, in the regulations to be supplied to the Secretary of State by relevant persons at such intervals, or on such occasions, as may be prescribed by the regulations;

(f) require the Secretary of State to consult the Oil and Gas Authority or any other person specified in the regulations before exercising functions by virtue of paragraph (d).

(7) Regulations under subsection (1) may make provision—

(a) requiring that security for the discharge of liabilities in respect of decommissioning costs must be provided by way of a fund (a “decommissioning fund”);

(b) about the management of decommissioning funds;

(c) about payments to a relevant person, or another person, from such funds;

(d) providing for payments from such funds to be subject to the approval of the Secretary of State;

(e) imposing on a relevant authority functions with regard to—

(i) the monitoring and oversight of decommissioning funds;

(ii) the approval of any matter relating to such a fund.

(8) This section is without prejudice to the breadth of subsection (4) of section 30 of the Energy Act 2008.

(9) Regulations under subsection (1) may require the Secretary of State to publish guidance about—

(a) estimates of decommissioning costs (including factors which it may be appropriate to consider in deciding whether or not to approve estimates of such costs);

(b) the structure, accrual and management of decommissioning funds.

(10) Guidance by virtue of this section may make different provision for different cases or circumstances.

(11) In this section—

• “carbon storage installation” has the same meaning as in section 30 of the Energy Act 2008;

• “decommissioning costs” is to be interpreted in accordance with subsection (6)(a);

• “decommissioning fund” is to be interpreted in accordance with subsection (7)(a);

• “economic regulator” has the same meaning as in Part 1 (see section 55);

• “geological storage” has the same meaning as in Part 1 (see section 55);

• “relevant authority” means the Secretary of State, the economic regulator or the Oil and Gas Authority.

Commencement Information

I1 S. 92 in force at 26.12.2023, see s. 334(3)(b)