Member

It is right that the oil and gas owner of an asset being repurposed for CCUS pays for the ultimate decommissioning of that asset. That approach ensures that funds are available to return the asset’s environment to its natural state at the end of its use in CCUS. In such cases, the Energy Act 2023 requires the oil and gas company to pay an amount equal to the cost of decommissioning into a decommissioning fund to make provision for the repurposed asset’s decommissioning liability when the CCUS project comes to an end. The oil and gas company would be entitled to tax relief on the decommissioning expenditure if it decommissioned the asset itself, rather than selling it to be repurposed, yet there is currently no such relief for any payments made into a decommissioning fund, and that disincentivises the repurposing of assets for CCUS.