Ban on new drilling confirmed as ministers consult on North Sea’s ‘clean energy future’ | Energy industry

The UK government has pledged to “unleash the future of clean energy in the North Sea”, as it confirmed plans to prohibit new drilling licenses, but also revealed proposals that could reduce the tax burden on the oil and gas sector.

The Treasury confirmed on Wednesday that the “Windfall” tax on Drigners Sea Drillers, which was presented in 2022 to help support families facing increasing energy bills after Russia’s invasion of Ukraine, from 2030.

In its place, the ministers will consult a new system, according to which duties move alongside the global wholesale energy prices, which industry said it provides investors “certainty”.

In addition to tax plans, the government announced an eight -week consultation on how to manage the transition of the North Sea of ​​oil and gas to cleaner energy, without leading to the loss of collective jobs.

The proposals follow the commitment of the work statement not to allow any new drilling licenses.

GMB and unifying trade unions Oppose the scaleWarning against the repetition of the destruction that has been visited in mineral societies if no plan to protect workers is developed.

Ed Miliband, the Minister of Energy, said that consulting will lead to job losses in the North Sea oil industry while moving to hydrogen, renewable energy and technologies such as capture and storing carbon.

“The North Sea will be at the heart of the future of energy in Britain,” said Miliband. For decades, its workers, companies and societies helped distribute our country and our world.

“Oil and gas production will continue to play an important role, and since the world embraces the motivation to clean energy, the North Sea can occupy our plan for change and the future of clean energy in the coming decades.”

Additions about the life of the current drilling licenses will not be affected, ensuring that oil fields can “work throughout their life”, the department energy He said security and net zero.

The government also said that the developers will be able to appeal to apply for approvals for already licensed projects, as a result of the “revised” environmental guidance in external projects.

This is followed by the ruling of the Supreme Court last year, which requires the organizers to consider the effect of burning oil and gas in the environmental assessments of new projects.

The oil industry issued a cautious welcoming in the government’s tax reform plan.

The North Sea drilling is currently paying a 40 % tax on their profits, in addition to the 38 % energy profits that the previous government brought in response to the energy companies that record the bumper profits as oil and gas prices rose in response to the war in Ukraine.

According to the proposals that will come from 2030, tax rates will be closely related to changing wholesale prices. This mechanism may mean that the tax rate will rise if wholesale prices jump sharply due to the shock of oil and gas prices.

The UK Trade Committee (OEUK) has welcomed the plans that it said will protect jobs and calm investors’ concerns about the volatile tax system.

David Whitch, CEO of OEUK, said that the sliding tax system will help starting to give certain investors and create a stable investment environment for years to come.

Greenpeace welcomed “reaffirming the pioneering government’s commitment in the world to end our dependence on the North Sea and Gas oil.”

“Excessive dependence on volatile and costly fossil fuels is the reason why our energy bills have been very high in recent years,” said Mail Ivans, the leader of the Greenpeace UK.

“The government is clearly aware that the establishment of a renewable energy system can provide this country and its energy workers in the field of economic opportunities and future stable jobs.”