Budget offers 'potentially strong route' to North Sea energy transition

Oil industry leaders have welcomed Budget measures to support the green energy transition.

Representative body for the oil and gas sector, OGUK, said the combination of taxation and investment measures offered a potentially strong route to transition energy and employment ahead of a crucial North Sea transition deal being negotiating with government ministers. Picture: BP
Representative body for the oil and gas sector, OGUK, said the combination of taxation and investment measures offered a potentially strong route to transition energy and employment ahead of a crucial North Sea transition deal being negotiating with government ministers. Picture: BP

Representative body for the oil and gas sector, OGUK, said the combination of taxation and investment measures offered a potentially strong route to transition energy and employment ahead of a crucial North Sea transition deal being negotiating with government ministers.

OGUK chief executive Deirdre Michie said: “We welcome the measures around supporting green energy innovation set out by the Chancellor in his Budget statement.

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“We look forward to engaging with his department on the review of research and development tax relief, which can be a key driver of success in the field of green technology.

“The investment towards the Aberdeen Energy Transition Zone, Global Underwater Hub and Hydrogen Hub in Anglesey are encouraging starts to this country’s journey to a low-carbon future that also supports climate goals, employment and energy security.

“Central to all of this is the North Sea transition deal reaffirmed by the Chancellor. Having powered the country for over 50 years, the UK’s oil and gas sector’s energy expertise is crucial to developing the green innovation required to see the UK achieve net-zero emissions by 2050.”

Rishi Sunak said he was committed to “green growth”, announcing measures including a national infrastructure bank with £12 billion to finance a green industrial revolution and £15bn of new green gilts this year.

There were changes to the remit of the Bank of England so it reflects the importance of environmental sustainability and the shift to net zero emissions, as well as plans to allow UK savers to invest in a green National Savings and Investment product.

There was also new funding to upgrade ports to support offshore wind, money for a UK-wide competition to develop floating offshore wind demonstrators and cash for a UK-wide competition on long-duration energy storage technology.

Funding for the Aberdeen Energy Transition Zone was also outlined in the Budget.

Sir Vince Cable, who is now a non-executive director of hydrogen infrastructure firm Element Two, said: “We warmly welcome the Chancellor’s commitment to invest in the Aberdeen Energy Transition Zone. The North-east’s vision and ambition to create an energy transition zone, coupled with support from the UK and Scottish governments, unlocks green energy potential.

“We are investing in prime locations in the north of Scotland, England and Ireland, and plan to deploy over 800 pumps onto the UK network by 2027 and over 2,000 by 2030. This essential green infrastructure accelerates energy transition strategies.”

The former leader of the Liberal Democrats added: “Hydrogen will undoubtedly form a key bridge in allowing us to meet net zero, particularly within the transport and heating industries.

“Production of hydrogen is a cornerstone of EU and UK energy policy and uptake of hydrogen fuelled vehicles is gathering momentum.”

Responding to the Budget speech, Labour leader Sir Keir Starmer said: “The Chancellor talks up his green credentials but his Budget stops way short of what is needed or what is happening in other countries.

“This Budget should have included a major green stimulus, bringing forward billions of pounds of investment to create new jobs and new green infrastructure.”

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