Consultation outcome

Environment Agency charge proposal for decarbonisation readiness: consultation response

Updated 3 March 2026

1. Introduction

This response document confirms the outcome of our decarbonisation readiness (DR) consultation and summarises the feedback we received.

This consultation proposed 2 new charges for new DR permitting activities and a new DR time and materials compliance assessment charge within the existing environmental permitting charge scheme.

We asked if consultees agreed with our proposal to introduce these charges to cover the new DR permitting and compliance assessment activities. The limited number of responses we received were a mix of positive, neutral, and negative.

We reviewed all comments submitted within the consultation feedback before considering whether it is appropriate to change our original proposals. These are the main themes we identified in the feedback:

• charge scheme approach
• supports or partially supports proposals
• how charges affect customers

We also address some individual points under the miscellaneous feedback section. These relate to themes that are identified less often in the consultation responses.

The consultation feedback helps us understand respondents’ concerns and any issues relating to our proposals. It is also valuable to hear from respondents who support our proposals.

2. Outcome

We have considered all consultation feedback and assessed whether we need to change our proposals.

After careful consideration, for all proposals we will progress the changes as outlined in the consultation document.

The DR charge proposals are designed to support our work on the decarbonisation of the power sector by making sure that new build and substantially refurbished combustion power plants are ready for low-carbon operation.

The proposed new DR charges allow us to introduce new permitting activities for assessing DR plans as part of a permit application. They also allow us to introduce a time and materials (hourly rate) charge for assessing compliance of DR plans as part of annual subsistence or operator-initiated reviews.

We have published our updated charging scheme. The revised charges apply from 28 February 2026. You can view these documents on GOV.UK:

• The Environment Agency (Environmental Permitting and Abstraction Licensing) (England) Charging Scheme 2022
• how we calculate our charges

3. How we ran the consultation

The consultation ran for 7 weeks from 18 November 2025 to 6 January 2026. It was hosted on GOV.UK and our consultations website (Citizen Space). It was open to anybody to take part. Those who preferred to respond by email or post were able to request a copy of the consultation document and response form instead of responding online.

We ran the consultation in line with our legal requirements to consult, following the Cabinet Office’s consultation principles guidelines. We told ministers of our plan to consult.

It was important for us to give our customers the opportunity to understand the proposals and the impact they will have. We encouraged our customers to give us their views through the consultation and publicised it openly.

We contacted 985 individuals and 28 trade associations directly via email to inform them of the consultation, as well as releasing press statements to reach other potential stakeholders.

4. Overview of responses

In total, we received 9 responses to this consultation that directly answered the consultation questions:

• 7 sent through our online consultation tool (Citizen Space)
• 2 submitted using our consultation response form

We did not receive any responses by email or letter.

Two of the 9 responses we received were submitted from the same email address. One was submitted on behalf of a named organisation and the other was submitted as an individual response. Both of these responses are included in the analysis.

The 9 responses that directly answered our consultation question format were submitted by:

• 7 organisations or businesses
• 1 individual
• 1 who did not specify whether they responded as an ‘individual’, on behalf of an ‘organisation or business’, or ‘other’

Consultees were asked if they had any of the following permits:

• electricity generating power plant – less than 20 megawatts thermal (MWth) (5)
• electricity generating power plant – at least 20 MWth but less than 50 MWth (3)
• electricity generating power plant – at least 50 MWth (2)
• energy from waste plant of any size (0)
• other permit (1)
• no permit held (0)

Annex 1 gives detailed information about the responses to all consultation questions and a summary of the themes we identified in the consultation feedback.

Annex 2 gives a list of organisations and groups that participated in the consultation. These represent a range of private sector organisations that we regulate.

We would like to thank all those who participated in the consultation and took the time to provide this valuable feedback.

5. Consultation feedback and our response

This section includes a summary of feedback relating to the main themes identified in consultation responses. We include our response under each of the main themes.

Charge scheme approach – feedback

Respondents sought clarity and transparency on how the proposed DR charges would apply in practice. This included how fixed application fees and the time and materials rate would operate across different permit types and compliance scenarios.

Some respondents asked for further explanation of how:

• the charges relate to the expected regulatory effort
• consistency of approach across officers will be maintained
• the arrangements might evolve as experience with DR assessments develops

A few respondents also requested alignment with established permitting processes, including clearer links to DR review cycles and the provision of site-specific advice where appropriate.

Respondents commented on the clarity and structure of the proposed charging arrangements, including:

• when charges would apply
• how they relate to existing permitting processes
• the transparency and consistency of the approach

These are some examples of the responses:

“There should be a scale of charges to accommodate the range of smaller sizes of plant, not just two. Disagree on the amount of the charge (£5,090 and £3,181) – this is way over current charges for odour management plans, fire prevention, emissions etc as listed in the current charging scheme. It is not proportionate in terms of work required for an assessment.”

“Additionally, we would expect these charges to be reviewed and adjusted over time as the Environment Agency gains experience and a clearer understanding of the actual time and resources required to assess DR plans within the permitting process.”

“The charges you are proposing for assessing the DR report (£3181) as part of the permit application are the equivalent of over 31 T&M hours. This is vastly disproportionate to the application fee (£6550), an additional 50% on top of the medium combustion plant permit application fee for assessing one supporting document. It is over 250% more expensive than the charge for assessing the oter management plans associated with these applications (e.g. OMP, EMP at £1,246). The Carbon Capture application fee is £14,915 which is more than double again. Further detail is required on why these applications would cost so much, as it is not encouraging circular economy.”

“Further detail is required on why these applications would cost so much, as it is not encouraging circular economy.”

Charge scheme approach – our response

As a public body, we must follow government guidance on managing public money. This means we must 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 to carry out an assessment and monitoring of DR plans.

The proposed charges for DR have been developed to ensure full cost recovery for the assessment work required under Schedule 25C of The Environmental Permitting (Electricity Generating Stations) (Amendment) Regulations 2025.

When considering how best to structure these charges, we explored the option of a lower tier rate for smaller combustion plants. Further analysis showed most plants in the 0 to 20 MWth range operate under standard rules permits and are not required to submit a DR report. For the smaller number of plants in this size band requiring a bespoke permit, a lower charge would not reflect the level of technical assessment needed to make a robust DR review. To provide a proportionate and workable approach, rather than multiple tiers, the charging structure has been simplified to 2 fixed charges.

Charges for DR assessments must reflect the time and resources required at today’s costs to determine whether a plant meets its statutory readiness obligations. These charges differ from those applied to other management plans (such as odour or fire prevention plans), which sit under different parts of the Environmental Permitting Charging Scheme and relate to distinct regulatory functions. Charges will be reviewed and updated over time to ensure they continue to reflect the cost of delivering the service, including the annual Consumer Prices Index‑linked adjustment from April 2027.

For standard rules permits, no DR plan assessment charge applies at the point of application where the operator confirms that the relevant carbon capture readiness (CCR) or hydrogen conversion readiness (HCR) conditions have been met. A time and materials compliance charge applies only where DR information needs to be reviewed during the life of a permit.

For bespoke permits, the fixed DR assessment charge applies at application. The hourly rate is used only for further assessment where needed. For example, when updated information is submitted or reviewed as part of ongoing compliance. The timing and extent of any compliance work will depend on the specific circumstances of the site and the information available to the Environment Agency. As with all permitting activity, operators will receive site-specific regulatory feedback where this is necessary to determine whether the DR requirements have been met.

We will apply the same governance, oversight, and quality assurance processes to DR assessments as we do across the wider permitting and compliance regime. These processes make sure assessments are made consistently and in line with regulatory standards, regardless of which officer completes the work. The time and material mechanism makes sure operators are charged only for the time actually required to complete regulatory compliance work, which supports a proportionate and transparent approach.

DR has been introduced to ensure that new and substantially refurbished combustion power plants can feasibly transition to hydrogen firing or retrofit carbon capture as infrastructure and markets develop over time. DR does not require technology installation now but makes sure that plants constructed today are capable of making this transition in future. The proposed charges recover the cost of delivering this assessment work from February 2026 onwards.

We will implement our proposals as outlined in the consultation.

How charge affects customers – feedback

Respondents commented on the impact of the proposed charges on operators, including views on the scale and structure of the fees and how they relate to different plant sizes and assessment effort. They also highlighted practical considerations such as alignment with existing charging levels, proportionality to regulatory work, and the implications for business planning and budgeting.

These are some examples of the responses we received:

“Budgets will have been set by companies already for Feb 2026 and therefore is a huge sum to find when it comes into effect part way through a financial year.”

“It would discourage operators from making changes to permits/upgrading equipment/installing new equipment for decarbonisation.”

How charge affects customers – our response

In 2021, government set a clear ambition 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 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. These regulations announced DR requirements would come into force on 28 February 2026.

Government has publicised these DR events, through regular communications and public consultations shared with trade bodies and individual stakeholders, which have led to our DR charge proposals.

With regard to the potential impact on budgets, DR charges will not immediately affect operators of plant in-scope unless they choose to apply for a new permit or permit variation within the 2025 to 2026 financial year.

We must recover the full cost of the services we provide. Customers will only pay for the regulatory service they receive. Although the cost to assess DR plans and check compliance will be an additional cost, the proposed charges are proportionately low in comparison to the actual cost of installing new equipment or converting existing equipment to low-carbon operation. By making sure DR plans are in place at the outset of operation and reviewed periodically, we can support operators in maintaining plant that remains capable of decarbonisation. This helps to avoid stranded assets and supports the UK’s net-zero and sustainable growth ambitions.

We will implement our proposals as outlined in the consultation.

Supports or partially supports proposals – feedback

Several respondents expressed support for the overall charging approach, noting that it is appropriate to pay a fee for DR assessments, and that higher charges for larger, more complex plants are justified. Some also supported the proposed use of the time and materials rate for DR-related compliance work and agreed that the assessment charges for bespoke applications appeared reasonable in principle.

These are some examples of the responses we received:

“Although [we] agree in principle with the introduction of a time-and-materials charge of £100 per hour for compliance work assessing decarbonisation readiness (DR) plans….”

“[We] agree with the proposed charges for the assessment of decarbonisation readiness (DR) plans as part of a permit application, as the approach appears reasonable.”

“We agree there should be a charge for tis work and a higher charge for large plants (as they are more complex)…. We disagree on the proposed charges (£5,090 and £3,181) – this is way over current charges for odour management plans, fire prevention, emissions etc as listed in the current charging scheme.”

Supports or partially supports proposals – our response

We appreciate the positive feedback provided by respondents on our charge proposals. We have also listened to your feedback where there was a partial agreement with our proposals.

We will implement our proposals as outlined in the consultation.

Miscellaneous theme - service we provide – feedback

A respondent commented that the DR application charge should come with a guaranteed service level. An example of this would be to specify the time in which the permitting process would be completed after submission.

This is the response we received:

“Introducing charges should come linked with guaranteed service level standards e.g. permit application review and approval, and the assessment of decarbonisation readiness plans as part of the process, to be completed within a specified period of time from the application being submitted.”

Miscellaneous theme - service we provide – our response

Environment Agency charges are set to recover the cost of determining permit applications and any additional technical assessments required. Charges are not linked to guaranteed service level standards, which is consistent with how all permitting activities are charged. The published DR guidance explains that application charges cover the work undertaken to assess a permit application, including supplementary assessments where needed.

Our customer service commitment standards, found on GOV.UK, specify we will process permits as quickly as possible and within the statutory timescales. Determination times can vary depending on the completeness and quality of the information submitted. This approach applies equally to DR assessments and to all other regulated activities.

We will implement our proposals as outlined in the consultation.

Miscellaneous theme – design of the consultation – feedback

A respondent requested further information on how the proposed DR charges would be applied. They also noted that despite being an individually small charge, it might not be accounted for in within an operator’s business plan.

This is the response we received:

“We request further details on how the proposed charges will be applied, which whilst individually small, have not been accounted for within business plans.”

Miscellaneous theme - design of the consultation – our response

Government introduced the new DR requirements in the Environmental Permitting (Electricity Generating Stations) (Amendment) Regulations 2025. We are duty bound to implement DR charges on permit applications for new and substantially refurbished combustion power plants from the fixed and unavoidable implementation date of 28 February 2026.

DR charges will not immediately impact operators of plant unless they choose to apply for a new permit, or permit amendment, within the 2025 to 2026 financial year.

We will implement our proposals as outlined in the consultation.

6. Next steps

We propose to implement the new DR charges from 28 February 2026.

7. Annex 1: Summary of consultation responses

This annex sets out the responses we received to our consultation on proposed charge increases to cover the cost of our service.

The consultation included questions on our:

• DR permit application charge proposals
• DR time and materials compliance assessment charge proposal

We received 9 responses through the online tool and consultation response form. We did not receive any emails or letters with comments relating to the consultation.

8. Additional questions

Within the online tool and response form we included an ‘additional question’ section to provide us with an understanding of who responded, and to help us better analyse the consultation feedback.

We asked if consultees were giving a response as an individual or on behalf of an organisation. Of the 9 responses (7 online and 2 using our consultation response form):

• 1 – was an individual
• 7 – were on behalf of an organisation, group, or trade association
• 0 – other
• 1 – no answer given

Consultees were asked if they held any of the following permits:

• electricity generating power plant – less than 20 MWth (5)
• electricity generating power plant – at least 20 MWth but less than 50 MWth (3)
• electricity generating power plant – at least 50 MWth (2)
• energy from waste plant of any size (0)
• other permit (1)
• no permit held (0)

The other permit listed was ‘sludge powered generator (incinerator), waste operations’.

Questions are set out in the same format as they were presented in the online consultation tool and response form. Multiple-choice questions gave respondents the option to select one response. These were followed by a free text box for comments.

For each question, we report all the multiple-choice option responses. These are followed by a list of themes identified most frequently in the free text comments.

Two of the 9 responses we received were submitted from the same email address. One was submitted on behalf of a named organisation and the other was submitted as an individual response. Both of these responses are included in the analysis.

Themes are given in descending order with the most frequently identified first.

Question 1: To what extent do you agree or disagree with the proposed charge for assessing decarbonisation readiness plans as part of a permit application.

This question received more negative responses (4) than positive responses (3):

• strongly agree – 0
• agree – 3
• neither agree nor disagree – 1
• disagree – 1
• strongly disagree – 3
• do not know – 0
• not applicable – 0
• did not answer – 1

Comments relating to this question were submitted by 8 respondents to the consultation (89%). The following themes were identified:

• ‘charge scheme approach’ – 7
• ‘how charge affects customers’ – 3
• ‘partially supports proposal’ – 3
• ‘supports proposal’ – 1
• ‘design of the consultation’ – 1

One respondent left no comment.

Any issues relating to specific teams or departments have been flagged to the relevant managers.

Question 2: To what extent do you agree or disagree with the introduction of a time and materials charge of £100 per hour for compliance work assessing decarbonisation readiness plans?

This question received more negative responses (5) than positive responses (2):

• strongly agree – 0
• agree – 2
• neither agree nor disagree – 1
• disagree – 3
• strongly disagree – 2
• do not know – 0
• not applicable – 0
• did not answer – 1

Comments relating to this question were submitted by 8 respondents to the consultation (89%). The following themes were identified:

• ‘charge scheme approach’ – 7
• ‘service we provide’ – 1
• ‘supports proposal’ – 1
• ‘partially supports proposal’ – 1

One respondent left no comment.

9. Annex 2: List of consultation participants and ‘other’

List of organisations or businesses that gave a name

The following organisation or business names were provided by respondents who gave permission for their responses to be published. Names are not included if the organisation or business has not given permission for us to publish their response.

Foodchain & Biomass Renewable Association (FABRA UK)

HiiROC Ltd

Severn Trent Water

SSE plc

TWUL