Designing a Workable Carbon Capture Use and Storage Regulatory Regime: Core Issues

2 min 13 sec January 15, 2026 (Edited)

Carbon capture, use, and storage (CCUS) is moving from a technical possibility to a practical necessity to cut emissions from industries that are hard to decarbonise. However, the technology itself is only part of the story. Whether CCUS projects are built at scale depends as much on laws, agencies, and rules as it does on engineering. The core issues are institutional: who makes decisions, who owns the subsurface, who pays if something leaks decades from now, and whether markets will generate steady demand for captured carbon.

This article explains why CCUS is not simply an engineering project but a systems challenge.

Governance

One key question is how to organise regulatory oversight.

Some countries concentrate decision making for CCUS in a single ministry or in tightly coordinated government departments; others spread responsibilities across multiple specialised agencies or subnational governments.

Centralised systems can make fast, consistent decisions and align policy closely with national climate goals. But they risk blind spots if the single agency misses a problem.

Systems that divide tasks among many bodies benefit from technical expertise and checks and balances, yet they often suffer from slow coordination, unclear accountability, and inconsistent rules across regions. What matters for project developers is clarity: clear roles, clear timing for decisions, and transparent processes.

Subsurface ownership

The ‘pore space’ — the voids in the subsurface that can hold CO2 — is the physical backbone of geological storage. Countries treat that space very differently.

Some countries treat offshore pore space as a public resource and make allocation straightforward. Others vest subsurface rights in the state, which can make it easier to assemble large storage areas and build shared hubs. By contrast, where ownership is fragmented, or where old legal doctrines give precedence to other underground users, negotiating access becomes slow and costly.

Clear rules about who controls pore space, how rights are bundled, and how neighbouring landowners are compensated make the difference between quick project formation and lengthy legal fights.

Licensing

Licensing and the project lifecycle are also practical concerns.

Some countries use a staged approvals approach: an initial exploration permit, a separate license to inject CO2, and a defined closure process. These stages typically come with requirements for technical studies, monitoring plans, environmental reviews, and public disclosure.

Where regulators publish clear criteria and keep a transparent register of licences and approvals, projects become more bankable. However, there is a danger in moving too quickly to rigid, detailed rules. If laws are written before regulators and industry learn from practical experience, the regime can lock in inefficient standards. Good frameworks enshrine the major gateways as primary law but also allow technical detail to evolve in regulations and guidance informed by operational learning.