North Sea shift to net zero to generate 40,000 jobs and £20bn a year

The North Sea’s transition to “net zero” could lead to 40,000 jobs and a £20 billion annual boost for the UK economy, a top think-tank today claimed.

The Policy Exchange think-tank paper identifies six priorities for developing the North Sea.

The report from the Policy Exchange suggests that energy industries such as wind and hydrogen could deliver £20bn per year in gross value added (GVA) by 2050. It argues that this could lead to a net increase of 40,000 jobs, even after the long-term decline in the North Sea oil and gas industry is factored in.

The think-tank identifies six priorities for developing the North Sea, including coordination and marine planning “to avoid over-crowding and inefficient uses of the seabed”, as well as “more consistent and clearer” environmental regulations.

The paper, titled The Future of the North Sea, also calls for new support and funding for low-carbon technologies, including hydrogen, floating wind turbines and carbon capture and storage.

The report from the Policy Exchange argues that the transition could lead to a net increase of 40,000 jobs, even after the long-term decline in the North Sea oil and gas industry is factored in.

Cross-border collaboration to help the UK work with other countries on joint projects such as interconnector cables following Brexit is also seen as a key priority.

Will Nicolle, lead author of the paper, said: “The Prime Minister has said he wants the UK to be the ‘Saudi Arabia of wind power’. To achieve that, we’ll need a strategic approach in an increasingly crowded space.

“To reach Net Zero, we need new frameworks and funding for things like hydrogen and carbon capture. The North Sea is absolutely central to that whole mission.

“Our research shows there’s a huge prize in terms of new jobs and local economic development. This means that the North Sea could hold the key to Boris’ Levelling Up agenda too.”

Ben Houchen, the Conservative mayor of Tees Valley, who wrote the foreword for the paper, said: “This report sets out some of the challenges and opportunities for the North Sea and coastal communities like mine in the Tees Valley.

“We know that development in the North Sea needs to be properly planned so that we can maximise the opportunities and jobs that come from Net Zero.

“It is also crucial that local people benefit from the transition to Net Zero, so I’m pleased to see that Policy Exchange has recommended community benefits funds for new offshore wind farms, among other investments that would help us to make the most of this economic boost.

“If we do not set in place the right policies and public investments then the north east of England and the east coast of Scotland will suffer economically as oil and gas declines, while the UK will miss its Net Zero target.”

The report calls for a series of measures to deliver on the six priorities including the setting up of a “UK Seas Authority” to help plan best use of marine resources, along with a minister for North Sea development.

Dan Roberts, director at Frontier Economics, said: “Frontier Economics was delighted to have the opportunity to contribute to the thinking in this Policy Exchange report.

“Activities related to the North Sea will be critical to achieving Net Zero, and can also play a major role in driving future economic activity. We look forward to seeing government action in the areas highlighted by the report.”

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