North Sea and the green energy transition

The Government has signalled that new drilling licenses in the North Sea be harder to come by as it rachets up its commitments to net-zero, but some are dismayed by the lack of a full stop.

UK is the first G7 country to agree a deal to support the transition from oil and gas to clean, green energy as the North Sea Transition Deal is agreed with industry.

The sector deal between the Government and oil and gas industry will support workers, businesses, and the supply chain through this transition by harnessing the industry’s existing capabilities, infrastructure and private investment potential to exploit new and emerging technologies such as hydrogen production, Carbon Capture Usage and Storage, offshore wind and decommissioning.

Extracting oil and gas on the UK Continental Shelf is directly responsible for around 3.5 per cent of the UK’s greenhouse gas emissions. Through the package of measures, the Deal is expected to cut pollution by up to 60 million tonnes by 2030 including 15 million tonnes from oil and gas production on the UK Continental.

Key commitments in the North Sea Transition Deal include the sector setting early targets to reduce emissions by 10 per cent by 2025 and 25 per cent by 2027 and has committed to cut emissions by 50 per cent by 2030.

Significantly, the Government will introduce a new Climate Compatibility Checkpoint before each future oil and gas licensing round to ensure licences awarded are aligned with wider climate objectives, including net-zero emissions by 2050, and the UK’s diverse energy supply.

Business and Energy Secretary Kwasi Kwarteng said: “Today, we are sending a clear message around the world that the UK will be a nation of clean energy as we build back better and greener from the pandemic. At every step on the path to net-zero emissions, we will create the right conditions for new green industries to base themselves in the UK and create new high-value employment opportunities, while future-proofing existing businesses to secure the long-term viability of jobs in our industrial heartlands.”

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