The UK Government is expected to launch a revamped net-zero strategy in Aberdeen on Thursday.
There has been no official confirmation as yet on this important event, but media reports suggest that announcements vital to the future health of the North-east economy are expected from the government.
Ministers have to publish a revamped net-zero strategy by the end of this month, after Friends of the Earth and other campaigners won a court case last year which found the previous strategy inadequate.
The Guardian says Thursday’s event was originally called “green day” in Whitehall, but has been rebranded as “energy-security day” and will focus on infrastructure. Disappointed campaigners have called the move a travesty.
One major announcement likely to be revealed is a “price floor” for the controversial windfall tax on North Sea oil and gas producers.
It is also anticipated that there will be positive news on carbon capture and storage, as ministers have promised an update on Track 2 funding – which the Acorn development in Aberdeenshire is banking on – before the end of the month.
Rosebank plans
Meanwhile, an update is expected on plans for Rosebank - a £4.5billion development proposed for west of Shetland.
The find is estimated to be capable of producing 300million barrels of oil, and is one of the largest untapped reserves in UK waters.
The Guardian says a decision on a licence for Rosebank has now reached the desk of Energy Secretary Grant Shapps.
Ryan Crighton, policy director at Aberdeen & Grampian Chamber of Commerce, said today: “It looks like the UK Government has heeded our call to wake-up to the damage being done by the windfall tax.
"We have spent 2023 lobbying hard for a price-floor mechanism to be added. It would appear that the Prime Minister will be in the North-east this week to announce just that.
“It is bonkers to suggest that the levy, in its current form, should remain. The Treasury’s North Sea tax take has risen from £381million per month in February 2022, when Russia invaded Ukraine, to £1.8billion today - yet the oil price is actually lower than it was, making the effective tax rate of 75% totally unviable.
Double win?
“Support for the Acorn project would be a double-win for our region.
“And, if we could make it a hat-trick by persuading the new first minister to bin the Scottish Government’s pointless presumption against future oil and gas exploration, then we might be at the start of a prosperous few years for Aberdeen and Aberdeenshire.
“We need our oil and gas sector to fuel and fund our energy transition. Creating an adverse investment environment helps nobody.”
David Whitehouse, CEO of Offshore Energies UK, hopes Thursday's announcements will encourage growth, boost jobs, cut emissions and protect the country's energy security.
He added: "Giving clear support to the UK’s expanding offshore energy industry will be a good start.
"Windfall taxes have damaged the confidence of companies to invest in the long-term energy security of the UK, which relies on oil and gas for 76% of its energy. When prices drop, it is fair that the windfall tax should fall away.
Important role
“Oil and gas will play an important part of the UK’s energy needs. A successful energy transition needs to attract investment in our domestic oil and gas sector. If not, UK energy import bills exceeding £100billion-plus will become a regular event – that’s money flowing out of UK homes and businesses to support the jobs, industries, and economies of other countries. The whole of the UK will be all the poorer for it.
“If this tax is changed, as conditions and prices have changed, that would be a positive move that would go some way to start rebuilding confidence and the business cases companies need to invest in the UK energy industry and in new technologies such as offshore wind, hydrogen and carbon capture, and our workforce of over 200,000 people around the country.
"We look forward to what government and all parties may say with a positive and constructive approach.”
The Guardian says that, on Thursday, plans to extend offshore drilling for oil and gas will be cited as necessary to keep the lights on, and justified by investment in CCS.
It adds that the revamped net-zero plans, including a green growth strategy, will miss out on key green measures.
The plans are said to include:
- Ofgem will not gain important powers to include the net-zero target in its regulation of the energy sector.
- No overarching new office for net zero, as recommended in the net-zero review by former energy minister Chris Skidmore.
- No comprehensive nationwide programme for insulation of the UK’s draughty housing stock, as green groups have been calling for.
Ministers will also respond to each of the 130 recommendations of the net-zero review conducted by Mr Skidmore, and will publish a 70-page green growth strategy, and a green finance strategy from the Treasury.