Aberdeen & Grampian Chamber of Commerce has renewed calls for the UK Government to abolish the Energy Profits Levy after senior representatives travelled to London to press the case directly with HM Treasury.
Chief Executive Russell Borthwick and Policy Director Ryan Crighton met officials in Whitehall this week, warning that the windfall tax on oil and gas producers is stifling investment, jeopardising jobs, and undermining efforts to fund the transition to cleaner energy.
They presented officials with a 'red box' of supporting evidence which highlighted the impact the tax is already having on Aberdeen and Aberdeenshire in particular while being an issue of critical national importance.
Introduced in 2022, the levy was billed as a temporary measure to capture extraordinary profits driven by global energy prices. It has since been increased and extended to 2030.
However, with commodity prices now long since stabilised, the tax is eroding confidence and pushing capital to rival basins overseas. This week Ineos confirmed it was investing £3billion in the US rather than the UK because of the fiscal regime. And we continue to see the ‘leakage’ of our world class supply chain and its people to projects in other energy regions around the world, meaning the UK won’t have threw capacity to build out new energy projects as they begin to scale. Ironically slowing down, not accelerating, net zero ambitions.
Russell Borthwick said: “This tax is not just hitting oil and gas operators – it’s rippling right through the North-east economy.
"Every pound of lost investment means fewer contracts for local suppliers, less work for our ports, fabricators, hauliers and hospitality businesses, and fewer opportunities for people to build long-term careers here.
“And the nation is being forced to import increasing amounts of fossil fuels to meet demand- paying no UK tax, supporting no UK jobs and at a much higher global carbon toll. It makes no sense.
"If the Government wants to protect jobs and support a managed transition, it cannot wait until 2030 to remove the Energy Profits Levy. It must go from the 2026-27 tax year.”
The Chamber has warned that without a clear timetable for ending the levy, operators will continue to scale back North Sea spending, placing thousands of high-value jobs and vital supply chain businesses at risk.
Industry body OEUK estimates that up to 1,000 jobs per month could be at risk between now and 2030 if the levy remains in place.