New deal for North Sea oil and gas stops short of ban on new licences

A North Sea oil and gas deal has been agreed between the UK Government, industry and trade unions to support the sector over the next decade.

It is backed by £16bn to cut emissions by half by 2030.

However, the deal stopped short of a ban on granting new oil and gas licences as called for by environmental campaigners.

Instead, the UK Government said it will introduce a “Climate Compatibility Checkpoint” which it says will see new licences granted only when compatible with climate objectives.

It said a licensing round which undermines the UK’s climate goals would not go ahead.

This measure will taken into consideration oil and gas demand, the prevalence of clean technologies and progress against emission reduction targets.

Mel Evans of Greenpeace UK called the deal a “colossal failure in climate leadership”.

She said: “Instead of finding ways to prop up this volatile and polluting sector, a better proposition for workers and communities would be for the government to confirm a ban on new licences, and put all its energies into a nationwide programme of retraining, reskilling and investment in renewables and green infrastructure.”

But the UK Government insisted the deal set out a “clear message” that the UK will “build back better and greener from the pandemic.”

Up to £10bn of the funding is earmarked for hydrogen production, while £3bn is for carbon capture and storage.

The sector has also agreed that by 2030 half of its offshore decommissioning projects will be provided by local businesses.

Interim emissions targets for the sector have been put in place, with an aim to reduce emissions by 10 per cent by 2025 and 25 per cent by 2027.

Scotland minister David Duguid said: “The oil and gas industry has already made great strides towards a greener, more sustainable future and the North Sea Transition Deal, agreed between the UK government and industry, takes those ambitions a step further.

“The North East of Scotland has long been seen as a centre of excellence in the oil and gas industry – there’s no reason why it can’t now be seen as a global centre of excellence for energy transition.

“This is not just about making the transition from hydrocarbons to renewables. It’s about a transition of jobs, skills and expertise as well.”