The plans will see some £16 billion of government and private investment directed towards cleaner energy technology to support jobs and reduce pollution.
The UK government also said it will introduce a climate compatibility checkpoint, which will be designed and implemented by the end of 2021, so that future oil and gas licences that are awarded are aligned with wider climate objectives.
And from the end of March, the UK will no longer provide financial support for the fossil fuel energy sector overseas, fulfilling a pledge made by the Prime Minister last year as he sought to drive international climate action.
Craig Shanaghey, president, operations at Aberdeen-headquartered energy and engineering services heavyweight Wood, said: “The North Sea transition deal is a welcome boost to the UK’s energy sector and will help cement the UK Continental Shelf’s position as an integrated energy hub at the forefront of the energy transition.
“By focusing on investment in decarbonisation, the development of cleaner energies and support for jobs, the deal provides a catalyst for innovation, collaboration and future growth.
“The industry, with people at its heart, will play a fundamental role in achieving our net zero goals whilst continuing to produce vital energy resources for the UK over the coming decades.”
Neil Gordon, chief executive of Subsea UK, the underwater engineering industry body, said: “With this deal we now have genuine collaboration and financial commitment from industry and government to deliver a just transition to net-zero that balances the country’s current and future energy needs, will protect and create jobs through the development of new world-leading projects and technologies in cleaner, greener energy which will be in demand globally.
“Working together with industry and government, the supply chain will be able to identify the gaps and build the capabilities, including new research, technologies and skills, required to tender and win work nationally and internationally, propelling these projects forward, driving exports and delivering value for the UK.”
Under the transition deal, some £16bn of investment includes up to £3bn to replace fossil-fuel power supplies on oil and gas platforms with renewable energy, up to £3bn for technology to capture and store carbon from fossil fuel energy and industrial processes, and up to £10bn for hydrogen production.
The sector is committing to ensure that half the offshore decommissioning and new energy technology projects will be provided by local businesses to secure jobs in the UK, government officials said.
Suzie Ferguson, carbon capture technical lead at Wood, said: “The North Sea has the foundations for a world-class carbon capture, transportation and storage network.
“The commitments made today, building on the momentum from the ten-point plan and the industrial decarbonisation strategy, show a clear vision and long-term commitment to CCUS [carbon capture, utilisation and storage]. This provides industry with the confidence it needs to co-invest in developing the infrastructure, skills and technology required to take this forward.”