The Carbon Dioxide Transport and Storage (Financing of Costs of Offshore Decommissioning) Regulations 2026

Schedule 2 Information required for a fund estimate or revised fund estimate

Regulations 5 and 6 Part 1 Work breakdown 1 A fund estimate or revised fund estimate must include a work breakdown. 2 A work breakdown must include— (a) the decommissioning actions that are likely to be included in an abandonment programme under Part 4 of the 1998 Act and a post-closure plan under the Licensing Regulations, (b) estimated dates for carrying out the measures that will be taken under that programme or plan, (c) the estimated dates for carrying out other decommissioning actions covered in the fund estimate, and (d) the estimated spend relating to those dates, estimated in nominal terms and linked to the decommissioning cost categories in Part 3 of this Schedule. Part 2 Infrastructure estimates 3 (1) A fund estimate or revised fund estimate must include infrastructure estimates, each to be assigned its own accounting code, as specified below— (a) a separate storage site estimate for each storage site covered under a storage permit; (b) where there is covered offshore infrastructure that is not part of a storage site, as applicable— (i) a carbon storage installation estimate; (ii) a pipeline estimate. (2) A fund estimate or revised fund estimate does not need to include a separate infrastructure estimate where the only covered offshore infrastructure is comprised in a single storage site covered under a single storage permit. 4 Where there is a decommissioning cost that will be applicable to more than one infrastructure estimate (“shared decommissioning cost”)— (a) each relevant infrastructure estimate must include an appropriate proportion of the shared decommissioning cost, (b) there must be sufficient explanation and evidence to explain the method for the apportionment of costs, based on the extent to which the shared decommissioning cost is relevant to the infrastructure estimate, and (c) the sum of all proportions of a shared decommissioning cost— (i) must equal the total amount of the shared decommissioning cost, and (ii) the total amount must be framed so as to ensure (whether by means of the timing of the measures proposed, the inclusion of provision for collaboration with other persons, or otherwise) that the cost of decommissioning is kept to the minimum that is reasonably practicable in the circumstances. Part 3 Decommissioning cost categories 5 (1) A fund estimate and revised fund estimate, and each infrastructure estimate included within a fund estimate or revised fund estimate, must provide a breakdown of decommissioning costs, estimated in nominal terms and based on reasonable forecasts and assumptions, relating to covered offshore infrastructure. (2) The breakdown of decommissioning costs must include each of the following categories of decommissioning actions— (a) monitoring of the storage site after closure, in accordance with paragraph 2 of Schedule 2 to the applicable Licensing Regulations, (b) reporting the monitoring results to the relevant regulator, in accordance with the applicable Licensing Regulations, (c) preparatory work occurring after the cessation of transport and storage activity, that is proposed to take place prior to the carrying out of an abandonment programme, (d) abandonment of the site including sealing the storage site and removal of the injection facilities in accordance with an abandonment programme, (e) abandonment of carbon storage installations not captured by paragraph (d) and submarine pipelines in accordance with an abandonment programme, (f) continuing inspection, monitoring and maintenance of any covered offshore infrastructure that is not removed, until the date the last financial contribution is paid in respect of a storage site covered under the section 7 licence, (g) environmental surveys conducted after a storage site has been closed and reporting of potential remedial works in accordance with an abandonment programme, (h) the financial contribution for each storage site covered under the section 7 licence, (i) costs relating to the provision of insurance cover for risks relating to a closed storage site or for other risks properly attributable to decommissioning obligations (including contributions required under insurance provided pursuant to the exercise of the Secretary of State’s powers to provide financial assistance under section 129 of the 2023 Act), (j) rent arising during the post operations period, under a lease or authorisation to exercise rights granted by the Crown Estate, or the Crown Estate Scotland, in respect of that storage site, (k) administration costs, overheads and expenses (including statutory fees or levies) to be incurred by the relevant person where these are properly attributable to matters in paragraphs (a) to (j), (l) post operations fund administration costs, and (m) a proposed contingency sum in accordance with paragraphs 6 to 8 and paragraph 10 of this Schedule. (3) The estimate must include an individual cost for each category of decommissioning costs listed in sub-paragraph (2), as well as a total figure for all the decommissioning costs. (4) An estimate under this Schedule must, where applicable— (a) incorporate information submitted under Part 4 of the 1998 Act, or submitted in a post-closure plan, or provisional post-closure plan, under the Licensing Regulations; (b) explain any differences between information submitted as mentioned in paragraph (a) and the information submitted for the purposes of a fund estimate. (5) A revised fund estimate under this Schedule does not need to include an estimate for the costs of a decommissioning action once that action has been carried out and completed. Contingency sum 6 A fund estimate and revised fund estimate must include a proposed contingency sum (“contingency sum”) that must take into account— (a) potential future inflation that is in excess of the inflation assumptions in the fund accrual profile, (b) other forms of market volatility affecting assumptions underpinning the fund estimate or fund accrual profile, (c) works or other actions being required beyond those planned for in the work breakdown, (d) the range of decommissioning actions and variability of associated costs, due to known uncertainties, such as environmental conditions in different parts of the seabed, or weather conditions, (e) evolving experience in offshore carbon dioxide transport and storage activities, both in the United Kingdom and elsewhere, and (f) the risks attached to different decommissioning cost categories, or decommissioning actions. 7 The overall value of the contingency sum proposed and approved must be no less than 10% of the estimated decommissioning costs, before the contingency sum is applied. 8 The amount of contingency may vary between different categories of costs, or different actions in a work breakdown, according to the level of uncertainty. 9 When exercising the right to require a modification to the fund estimate as provided for under paragraph 2(2)(b) and 3(1)(b) of Schedule 3, the Secretary of State may require a higher contingency sum than that proposed by the section 7 licensee. 10 Where a contingency sum is proposed by a section 7 licensee, or modified by the Secretary of State, the proposal or modification respectively must— (a) include reasons for the amount of contingency, and (b) provide the calculation and method by which the contingency sum has been estimated. Part 4 Revision of fund estimate Interpretation of Part 4 of Schedule 2 11 In this Part— (a) paragraphs 13 to 20 apply during the fund operational period, and (b) paragraphs 21 to 23 apply during the post operations period. 12 For the purposes of this Part— “contingency sum” means the contingency sum included in a fund estimate in accordance with paragraphs 6 to 10 of this Schedule; “fully revised fund estimate” means a fund estimate for which all decommissioning cost categories and assumptions have been reviewed; “material change” means a change during the fund operational period affecting the facts or assumptions underpinning an approved fund estimate (including a change to the technical, market or legal assumptions), that the Secretary of State has determined under paragraph 17 that it is, or may be, a material change, based on the matters in paragraph 19; “partially revised fund estimate” means a fund estimate in respect of which specific, but not all, decommissioning cost categories, assumptions, infrastructure estimates or other discrete elements have been reviewed; “periodic review period” means the six month period that begins with the day that is twelve months before and ends on the day that is six months before the periodic review date. Periodic review during fund operational period 13 During the fund operational period, a section 7 licensee must submit a fully revised fund estimate to the Secretary of State for approval— (a) during each periodic review period, and (b) during the period that begins twelve months before and ends ten months before, the expected date of closure of a storage site, unless the Secretary of State agrees in writing that the last revised fund estimate submitted under sub-paragraph (a) is sufficiently recent. Other grounds for review of estimate during the fund operational period 14 (1) Where a section 7 licensee has submitted an application to a relevant regulator to make a change affecting the scope, construction or operation of covered offshore infrastructure, a section 7 licensee must submit to the Secretary of State either— (a) an approval request for a revised fund estimate, or (b) a request for the Secretary of State to make a determination under paragraph 17 that the change is not a material change. (2) The section 7 licensee must submit an approval request under sub-paragraph (1)(a), or a request under sub-paragraph (1)(b), within 28 days beginning with the day after the day on which the section 7 licensee submitted the application to a relevant regulator to make a change affecting the scope, construction or operation of covered offshore infrastructure. 15 The Secretary of State may serve a notice on a section 7 licensee, requiring that licensee to submit a revised fund estimate for approval, where— (a) the Secretary of State considers that there is or may be a material change affecting the approved fund estimate, or (b) a written request, explaining why there is or may be a material change affecting the approved estimate, has been made to the Secretary of State by a relevant regulator or a relevant person. 16 A revised fund estimate submitted under paragraph 14(1)(a) or required under paragraph 15 must include— (a) a statement confirming whether it is a partially revised fund estimate or fully revised fund estimate and the reason why the section 7 licensee considers that type of estimate to be appropriate, (b) a description of relevant changes that have occurred since the last approved estimate was submitted, (c) the proposed changes to the information included in the previous approved fund estimate, together with an explanation of why those changes are necessary, and (d) an updated breakdown of decommissioning costs, in accordance with Parts 1 to 3 of this Schedule. Procedure for determining if a change is a material change during the fund operational period 17 The Secretary of State must respond in writing to a request made under paragraph 14(1)(b) or paragraph 15(b), within a reasonable period of time, determining whether— (a) the change is not a material change, or (b) the change is or may be a material change. 18 Where the Secretary of State determines under paragraph 17 that a change is or may be a material change— (a) the Secretary of State may specify in a notice to the section 7 licensee that a revised fund estimate must be submitted to the Secretary of State for approval and the date for submission, and (b) the section 7 licensee must submit the revised fund estimate to the Secretary of State for approval by the date required in the notice. 19 For the purposes of paragraph 17, the Secretary of State must determine that a change affecting the information in an approved fund estimate is or may be a material change, unless the Secretary of State determines that— (a) one or more of the circumstances in paragraph 20 apply, or (b) the Secretary of State is satisfied for other reasons (including costs impact or timing), the change is not sufficiently significant to require, before the next periodic review date, a review of either— (i) the monthly contribution, or (ii) other matters in the funding and investment strategy. 20 The circumstances for the purposes of paragraph 19(a) are that— (a) there is likely to be no change, or a decrease, in the overall value of the fund estimate, (b) it is likely that an increase in the value of the fund estimate would not constitute a material deficit, or (c) a change affecting the scope, construction or operation of covered offshore infrastructure— (i) will take effect in the two year period ending on the last day of the fund operational period and will be considered as part of an upcoming review of the fund estimate under paragraph 13(b), (ii) at any other time during the fund operational period, will take effect in the six month period ending on a periodic review date and will be considered as part of an upcoming review of the fund estimate under paragraph 13(a). Revision of estimate during the post operations period 21 During the post operations period, a relevant person must submit a fully revised fund estimate, for all outstanding decommissioning actions yet to be carried out, to the Secretary of State for approval— (a) no later than six months after the last day of the fund operational period, unless the Secretary of State agrees in writing that a later date may apply, (b) on every 5th anniversary after the submission of the revised fund estimate under sub-paragraph (a). 22 A relevant person must notify the Secretary of State and a relevant regulator, where the relevant person becomes aware that the remaining estimated decommissioning costs have increased, or are likely to increase, by an amount that is more than 5% of the remaining contingency sum in the fund. 23 In addition to reviews under paragraph 21, the Secretary of State may serve a notice on a relevant person, requiring a partially revised fund estimate or fully revised fund estimate to be submitted to the Secretary of State for approval, by a particular date (which must be reasonable), where— (a) the Secretary of State receives a notification under paragraph 22, or (b) the Secretary of State otherwise becomes aware that the remaining estimated decommissioning costs have increased, or are likely to increase, by an amount that is more than 5% of the remaining contingency sum in the fund.