The UK Government is advancing its efforts to facilitate the UK’s journey towards achieving a net-zero carbon footprint in a practical, balanced, and achievable manner. They are announcing additional licencing opportunities that aim to safeguard British employment opportunities and enhance energy security, thus diminishing the UK’s dependence on imports.

In the upcoming King’s Speech, there will be legislation outlined that mandates the North Sea Transition Authority (NSTA) to periodically solicit applications for fresh production licences on an annual basis. This initiative is designed to offer assurance and inspire confidence among investors and industry stakeholders.

The UK’s energy landscape still heavily relies on oil and gas to meet a significant portion of its energy demands. Data from the Climate Change Committee underscores that even as the UK strives to achieve net zero emissions by 2050, it will continue to depend on oil and gas resources to meet its energy requirements.

Promoting domestic gas production, rather than importing liquefied natural gas from other countries with higher carbon emissions, has several advantages. It not only results in lower-carbon fuels within the UK but also yields benefits for both households and businesses. The combined oil and gas sector plays a crucial role in supporting over 200,000 jobs and contributes approximately £16bn to the UK’s economy annually.

By reducing the UK’s dependence on energy imports from potentially hostile states, the nation becomes less vulnerable to unforeseeable international pressures. This strategy aims to ensure a more secure and diversified energy system. As the UK advances in renewable energy sources and new nuclear technologies, the resulting robust energy mix is expected to lead to long-term reductions in household energy costs.

Each annual licensing round will be contingent on the fulfilment of specific criteria that are aligned with the transition to a net-zero carbon future. The initial criterion necessitates that the UK’s projected oil and gas imports from foreign countries must surpass its domestic production.

The second prerequisite is that the carbon emissions stemming from the production of UK gas should be lower than the emissions associated with the equivalent amount of imported liquefied natural gas.

In the event that both of these conditions are satisfied, the North Sea Transition Authority (NSTA) will be mandated to solicit applications for new licenses on an annual basis.

This legislation forms a part of a broader King’s Speech agenda, which prioritizes the implementation of long-term decisions aimed at ensuring the prosperity and security of our nation.

Prime Minister Rishi Sunak said: “I am proud that the UK is a world leader in reducing emissions, and of our new plan to transition to net zero without adding undue burdens on households and securing the country’s long-term interest.

“Domestic energy will play a crucial role in the transition to net zero, supporting jobs and economic growth, while also protecting us from the volatility of international markets and diversifying our energy sources. The clarity and certainty that our new legislation will provide will help get the country on the right path for the future.”

The UK’s oil and gas sector holds a crucial position in the country’s energy transition efforts. The development of new gas and oil fields in the North Sea offers a promising opportunity to produce hydrocarbons with significantly lower emissions compared to the extraction from older, existing fields. This approach contributes to a substantial reduction in the environmental impact of future production.

By prioritising domestic production, we create the foundation for attracting green investments, harnessing the vital role played by the oil and gas industry. These investments can, in turn, drive the advancement of clean technologies that are essential for achieving our ambitious net-zero emissions target.

The UK is resolutely committed to realising its climate objectives and reaching a state of net-zero emissions by 2050. The government’s track record underscores this commitment, as it has achieved the most rapid reduction in greenhouse gas emissions among all G7 nations from 1990 to 2021.