ECONOMIC REGULATION AND OPEN ACCESS FOR CO₂ INFRASTRUCTURE

A company that controls the only practical CO₂ pipeline or storage route can determine whether other projects gain access and what they pay. Government can place that service under economic regulation, giving an independent regulator powers to require fair connection terms, transparent capacity allocation and timely settlement of access disputes. These rules can apply to privately financed as well as public infrastructure. Where control over prices or more predictable cost recovery is also needed, the regulator can limit the revenue an operator may collect. Under a regulated asset base model, it approves efficient investment costs and a permitted investor return that charges recover over time. The licence specifies what the operator must provide for that income, such as agreed capacity, reliable service and fair access. This can help finance shared infrastructure and let removal developers assess whether they can obtain its services on workable terms.

Government should identify where customers lack alternatives and decide which services need access duties, regulated charges or both. Rules must state how operators publish spare capacity, evaluate connection requests and justify refusals, including where CO₂ quality is incompatible or capacity is safely committed. Unused reservations and preferential treatment of an operator's affiliated companies need particular attention. For regulated revenues, the central decisions are which investment costs customers should repay, what return investors may earn and who bears construction delays or low initial use. A published method and an appeal process should precede major commitments. Charges should distinguish common infrastructure from a customer's dedicated connection and provide for necessary expansion. Leakage, closure and service-continuity costs also need an identified payer. If government separately supports early revenue, its payment conditions, limits and end date should be explicit.

Clear connection terms let removal developers assess the cost and availability of services before committing to a capture plant. A right to challenge exclusion can open a privately financed network to additional users, including smaller firms without the negotiating power of its first customers. Where substantial new infrastructure is needed, approved recovery of efficient costs over many years can give lenders and investors a more dependable source of income. Defined rules on revenue and performance can reduce the risks investors price into their returns and help keep user charges proportionate. Where its legal powers permit, the regulator can require economically justified expansion and prevent a large customer from blocking future access. The arrangements help removal projects whose constraint is an inaccessible or difficult-to-finance network; revenue from selling removals still needs to be secured.

Access duties accomplish little if operators conceal spare capacity, favour related companies or draw out negotiations until a prospective customer abandons its project. Independent dispute decisions must therefore be timely and enforceable. Revenue regulation creates another risk: recognising excessive construction costs or allowing overly generous returns can leave users paying too much, while charges that fail to cover efficient costs can deter investment and expansion. Inflexible licences can protect incumbents even after competing routes emerge. If government covers low early revenues, taxpayers also bear a fiscal commitment that should be reported separately. Regulators need reliable cost data, technical expertise and authority to challenge operators, while respecting legitimate existing contracts and safe operating limits.

The regulator should compare published capacity with bookings and actual use, examine refused connections and measure the time needed to agree access or resolve disputes. It should test whether independent customers receive terms comparable to those offered to an operator's related companies. Where revenues are regulated, reviews should compare investment and operating costs, financing assumptions, utilisation and service performance with the allowances used to set charges. These findings should determine future cost allowances, performance incentives or required expansion. Government should report any support payments and remaining commitments separately. Reviews need predictable procedures so correcting poor performance does not arbitrarily change the terms of existing investment.

Government should define the regulator's powers with competition authorities and the bodies overseeing safe transport and storage. Operators must supply cost, capacity and performance information; independent engineers and financial specialists should test it. Existing and prospective users, including smaller removal developers, should be able to challenge connection conditions and proposed charges. Lenders and investors can explain which risks prevent financing, while the finance ministry decides whether public funds will bear any of them. Communities should participate in decisions about siting and environmental effects, with the economic regulator explaining which service and charging issues it can resolve.

National lawmakers can define the services subject to economic regulation and empower regulators to enforce access and charging duties. Regional or state authorities can do the same where those powers are devolved. Supranational lawmakers can require common access rights and independent dispute procedures, with national regulators applying them to individual networks. Operators comply with the resulting duties; owning or financing a network does not confer authority to regulate other firms.