UK announces £16bn North Sea transition deal
The UK has announced a long-awaited North Sea transition deal, which it says will unlock £16bn ($22bn) in government and oil industry investment in tackling the sector's emissions.
The sum includes up to £10bn in funds for hydrogen production, along with as much as £3bn to replace fossil fuel-based power supplies on oil and gas platforms with renewable energy, and a further £3bn for carbon capture utilisation and storage initiatives, the government said on March 24. In return, the sector has committed to cutting emissions by 10% by 2025, 25% by 2027 and 50% by 2030. It will also ensure that 50% of offshore decommissioning and new energy projects is undertaken by local businesses by 2030, providing a boost to UK industry.
"Today, we are sending a clear message around the world that the UK will be a nation of clean energy as we build back better and greener from the pandemic," the UK's business and energy secretary Kwasi Kwarteng said. "We will not leave oil and gas workers behind in the UK's irreversible shift away from fossil fuels. Through this landmark sector deal, we will harness the skills, capabilities and pent-up private investment potential of the oil and gas sector to power the green industrial revolution, turning its focus to the next-generation clean technologies the UK needs to support a green economy."
The UK was one of the first countries to set a goal of reaching net-zero emissions by 2050. The country's climate credentials are under heightened scrutiny ahead of its hosting of the 2021 United Nations Climate Change Conference (COP26), which will take place in Glasgow this October. Earlier this month the government unveiled an industrial decarbonisation strategy, pledging over £1bn in funding for cutting CO2 emissions.
The head of industry association Oil & Gas UK, Deirdre Michie, described the deal as a "transformative partnership which will harness the expertise of the UK offshore oil and gas industry to urgently meet the country's climate ambitions of net zero emissions by 2050."
"It will unlock billions of pounds of investment and see government and industry work together to deliver a homegrown energy transition, realising innovative low carbon solutions that can be exported globally," she said.
The deal will help the UK oil and gas supply chain secure new low-carbon export opportunities overseas, the government said. At home, it aims to bring an end to routine gas flaring by 2030, and "tackle regulatory and policy barriers" to the use of clean energy sources like offshore wind turbines to power oil and gas installations, which currently mostly run on gas and diesel generators. The government also said it would review the remit and powers of offshore environmental and decommissioning regulator OPRED, placing more of its focus on emissions reduction.