The United Kingdom, has indicated that it is not completely phasing out its oil and gas industry, but highlighted that new licensing rounds may be paused only if they are not aligned with the UK’s climate change commitments, including the UK’s target of reaching net zero.

In tandem with this ambition, the UK government has set out a new climate compatibility checkpoint for the oil and gas industry to ensure that new projects are allowed on the basis, they can show that their proposed emissions are less than those that come from importing fossil fuels.

These plans form part of the country’s commitment to ensure an orderly transition to a lower carbon future while maintaining the country’s energy security of the UK’s energy supply, supporting high-value jobs, and safeguarding the expertise necessary to achieve greenhouse gas emissions target of 1.5 degree Celsius by 2050.

The new ‘six test’ plan sets out potential tests that could be used to assess new licenses, including domestic demand for oil and gas, the sector’s projected production levels, the increasing prevalence of technologies such as carbon capture and hydrogen generation, the Ministry of Energy and Climate Change said.

The UK said it would also consider its status as a net importer or exporter of oil and gas, and “international Scope 3 emissions from UK-produced oil and gas and whether these would be expected to fall in line with the decline in emissions required to keep global warming within 1.5 degrees Celsius if further licensing rounds were agreed.”

Chekpoint Measure to Support UK’s Oil and Gas Sector During Net Zero Transition

The UK Energy and Climate Change minister, Greg Hands said: “This new checkpoint will be key to our plans to support the oil and gas sector during its net zero transition. It helps safeguard the future of this vital UK industry as we create more opportunities for green jobs and investment across the country.”

However, the International Energy Agency (IEAs) has said that to reach net zero emissions by 2050, no new oil and gas fields should come online.

“Clearly we are expecting there to be future licenses. Homegrown oil and gas is generally more climate friendly than imports. That is something which I think the government is keenly aware of.”
Greg Hands, UK Energy and Climate Change Minister

The UK government Minister for Scotland, Malcom Offord said:

“The UK government fully supports the oil and gas industry in its transition away from fossil fuels to cleaner, greener energy sources, such as wind and tidal power. Until we have sufficient supply in those areas, maintaining a domestic supply of oil and gas– albeit reduced– will be necessary.
“We are working closely with the industry on the North Sea Transition Deal, and we are consulting to ensure this addresses climate concerns while protecting and creating jobs.
“It will all help us accelerate towards a fully green energy sector in line with the Prime Minister’s 10 point plan and our robust 2050 net zero goals.”
UK Gov’t Minister for Scotland, Malcom Offord

UK’s Plans in line with IEA’s global scenario

Hands said the government’s plans agreed with the IEA’s recommendation to have no new oil and gas, because that was a “global” scenario, and the UK is only one country.

Andy Samuel, Chief Executive of the Oil and Gas Authority (OGA) said:

“We welcome the launch of this consultation. Alongside the net zero test the OGA is applying to our decisions such as field developments, these proposals recognise the important role of industry in helping meet the UK’s energy needs while accelerating the energy transition to net zero.”

Meanwhile, the new tests will not cover projects such as Cambo, which have already gone through the initial licensing round. The Cambo oil field has recently been under huge criticisms by environmental groups to prevent any projects from happening on the field.

“As world leaders in the global effort to tackle climate change, the UK is driving the global shift away from fossil fuels. However, we recognise the important role that oil and gas will play over the coming decades as the UK transitions to low carbon solutions, and the Climate Change Committee acknowledges that the transition to non-fossil forms of energy cannot happen overnight.”
Department for Business, Energy and Industrial Strategy