Key Facts

• Clause 7 pertains to the grant of licences for carbon capture projects.
• The interim period allows the Secretary of State to grant licences before transferring responsibility to Ofgem.
• Licences will be granted in the mid-2020s for track 1 CCS clusters.
• Clause 8 grants the Secretary of State power to create different types of licences for carbon capture and storage activities.
• Whitehead's amendments aim to ensure that only fit and proper persons can receive licences or transfer them under various clauses of the Energy Bill.
• Amendment 77 aims to introduce a fit and proper persons test for licensing carbon capture and storage activities.
• The amendments would affect the licence application, transfer, special administrative regime, and transfer schemes.
• LCCC is expected to be the counterparty for low-carbon hydrogen agreements.
• Amendment 1 corrects a drafting error related to consultation with devolved Administrations.
• The Government’s CCUS cluster sequencing programme is underway to identify eligible clusters for support.
• Clause 9 provides for a licence application process set out in regulations, including procedures and conditions.
• Fees will be proportional to the size of entities applying for licences.
• Clause 8 enables discretionary power for future licensing.
• Clause 11 makes general provisions regarding conditions of transport and storage economic licences.
• The clause confirms that the licence may contain conditions requiring a payment to be made to the economic regulator during the term of the licence.
• Clause 12 enables the Secretary of State to specify standard conditions for licences.
• Subsection (2) allows the Secretary of State to publish conditions in whatever manner they consider appropriate.
• Alan Whitehead expresses concern that publication may be restricted or inappropriate.
• The Minister assures that information will be published widely and easily accessible.
• Andrew Bowie confirms Ofgem as the economic regulator.
• Clause 1 sets out that the economic regulator refers to Ofgem.
• The Bill includes provisions for the Secretary of State to grant licences during an interim period.
• The clause refers to schedule 1 which outlines interim power of the Secretary of State to grant licences.
• There is concern about how and when this interim power will be transferred from the Secretary of State to Ofgem.
• The Minister commits to providing a road map for CCUS with increased clarity on timescales.
• Carbon dioxide transport and storage licences cannot be bought or sold separate from the legal entity they are granted to.
• Clause 18 of the Energy Bill allows for carbon dioxide transport and storage licences to be transferred with Ofgem's consent.
• The economic regulator must notify the Secretary of State before giving consent to a licence transfer.
• Clauses 20 to 25 relate to appeals for licence modification decisions made by the economic regulator for carbon dioxide transport and storage.
• Appeals can be brought to the Competition and Markets Authority (CMA) with its permission, addressing matters such as being trivial or vexatious.
• Schedule 2 outlines detailed processes for appealing CMA decisions, including timeframes of four months for most appeals and six months for price control decisions.
• The Energy Prices Act 2022 grants significant powers to the Secretary of State in the energy sphere.
• Clause 20(4) allows the CMA to refuse permission for an appeal on fairly wide grounds.
• Clause 22(4) permits the CMA to limit appeals based on errors of fact.
• Clause 30 is vague about whether impact assessments should be undertaken.
• The clause does not define what 'important' means, leaving it open to subjective judgment by the economic regulator.
• There are multiple grounds under which an impact assessment can be voided or avoided.
• The government aims to provide as much clarity as possible about how the energy sector is governed.
• There are concerns over subjective interpretations of impact assessments.
• Vaguer language could lead to judicial reviews.