Environment Agency charge proposals for decarbonisation readiness

Overview

We are the Environment Agency. We carry out a wide range of regulatory services, and we charge our customers for the regulatory work we do. We make sure our charges are fair and transparent and that they reflect the cost of the service we provide.

New decarbonisation readiness (DR) requirements for in-scope new or substantially refurbished electricity-generating combustion power plants in England will become part of our regulatory duties under the Environmental Permitting (England and Wales) Regulations 2016.

We are proposing new charges to recover the cost of assessing DR reports submitted with permit applications and reviewing updated DR plans during the life of a permit. These charges will apply from 28 February 2026.

Background

The government has committed to decarbonise the power sector by 2030.

In July 2021, the Department for Energy Security and Net Zero (DESNZ) published decarbonisation readiness: joint call for evidence on the expansion of the 2009 carbon capture readiness requirements. This sought initial views on reviewing the scope of the 2009 carbon capture readiness (CCR) requirements.

In March 2023, DESNZ conducted a public consultation on proposals to expand the CCR requirements and the decarbonisation readiness: government response to consultation was published in October 2024.

As a result, the CCR requirements were replaced by DR and introduced through the Environmental Permitting (Electricity Generating Stations) (Amendment) Regulations 2025. This change comes into force on 28 February 2026, and the Environment Agency will be the appointed regulator. DR applies to England only and the current CCR requirements will continue to apply in Wales.

The introduction of DR supports the decarbonisation of the power sector by making sure that new build and substantially refurbished combustion power plants are ready for low-carbon operation.

We asked operators to provide their opinions on our decarbonisation readiness: proposed guidance consultation. This closed on 9 May 2025. We published our response to the DR guidance consultation and the DR guidance on GOV.UK. The guidance applies to new and substantially refurbished combustion power plants in England. It offers practical advice for environmental permit applications submitted to the Environment Agency.

The guidance is intended for use by:

• operators when designing their combustion power plants and preparing their application for an environmental permit
• regulatory staff
• any other organisation or member of the public seeking to understand how environmental regulations and standards are applied

What we are consulting on

As a public body, we must follow government guidance on managing public money, which means we have to recover the full cost of the services we provide; customers will only pay for the regulatory service they receive. 

Using our experience and knowledge of similar regulatory work, we have considered the likely costs of carrying out the assessment and monitoring of DR plans.

We propose to:

• create 2 new charges for assessing DR plans as part of a permit application
• introduce a time and material (hourly rate) charge for assessing compliance of DR plans as part of annual subsistence or operator-initiated review

These charges will not apply to standard rule permit applications where an operators’ application declares they meet the DR requirements for capturing carbon or converting to hydrogen fuel. These standard rules currently relate to:

• medium combustion plant
• specified generators
• anaerobic digestion

To help you understand what we include when we develop or review a charge, we have provided guidance on how the Environment Agency calculates its charges on GOV.UK.

The requirements will come into effect for permit applications submitted after 28 February 2026.

Why your views matter

We would like to hear from you so we can understand your views on the impacts and benefits of our proposed new charges for DR.

How to respond

This consultation runs for 7 weeks from 18 November 2025 until midnight on 6 January 2026. You can view the consultation and supporting documents by clicking on the relevant link in the 'related' section at the end of this page. We will consider all responses received by the closing date before finalising our proposals to submit for approval by government.

Citizen Space provides an easy and efficient way for you to respond online. It allows us to:

• gather all responses in one place
• summarise responses quickly and accurately
• reduce the cost of the consultation

Publishing our consultation response 

We aim to publish our response on GOV.UK within 12 weeks of this consultation closing and before we implement any changes. It will include a summary of the comments and queries we receive.  When we publish our response a link will be added to this page.

Please click on the 'online consultation' link below to answer the consultation questions.