What the North Sea Transition Deal means for our future
In March 2021, the UK Government announced the ‘North Sea Transition Deal’ with the oil and gas industry to support the sector’s transition to a greener future.
Here’s what you need to know and why it matters.
The deal aims to deliver the skills and innovation needed to decarbonise the production of oil and gas in the North Sea.
It is expected to cut pollution by up to 60 million tonnes by 2030 and support up to 40,000 jobs in the energy industry.
The deal also outlines the following commitments from UK Government:
- Reducing emissions by
- 10% by 2025,
- 25% by 2027
- and 50% by 2030.
- Introducing a new ‘Climate Compatibility Checkpoint’ before each future oil and gas licensing round to ensure licences awarded are aligned with wider climate goals. Licensing rounds are typically opened every 12-18 months and issue licences from the industry regulator, the Oil and Gas Authority, to explore and produce oil and gas from the seabed
- A joint government and sector investment of up to £16bn by 2030 to help reduce carbon emissions.
- £3 billion to replace fossil fuel-based power supplies on oil and gas platforms with renewable power.
- £3 billion for Carbon Capture Usage and Storage (CCUS).
- £10 billon for hydrogen production.
- Development of a people and skills plan to support the transition of the workforce which means the right workers with the right expertise will be able to work in careers across the energy industry.
- Removing direct support for fossil fuels projects overseas from 31 March 2021 which means the UK Government will no longer offer export finance, aid funding and trade promotion for new oil, natural gas or thermal coal projects, with very limited exceptions. This decision accelerates the shift to supporting green technology and renewable energy
- Sector commitment to ensuring that 50% of offshore decommissioning (i.e. dismantling an oil and gas platform no longer in use) and new energy technology projects will be provided by UK businesses by 2030.
The deal can help to create an offshore energy sector to power the UK’s net-zero ambitions by bringing the different parts of our existing energy system closer together and accelerate the growth of new technologies. It can support people, companies and communities to benefit from a fair transition. And ultimately, it can help us achieve our net-zero goals and reach a greener future.