Greater than 100 UK power provide chain corporations have known as for Power Income Levy (EPL) reform, business physique Offshore Energies UK (OEUK) introduced in a launch despatched to Rigzone lately.
In a letter co-signed by greater than 110 corporations to Chris McDonald MP – Minister for Business within the Division for Power Safety and Internet Zero (DESNZ) and the Division for Enterprise and Commerce (DBT) – OEUK’s Provide Chain Champion, Steve Nicol, who can be Government President of Operations at Wooden, “led a name to authorities urging them to work with business and implement a aggressive, everlasting tax regime from 2026, as outlined within the Treasury’s 2025 oil and fuel worth mechanism session”, the discharge highlighted.
The letter, which was carried in full in OEUK’s launch, identified that its signatories embody producers, skilled companies, and engineering corporations.
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“Collectively, the organizations signing this letter signify over 110 provide chain corporations which assist tens of 1000’s of jobs,” the letter acknowledged.
“We contribute billions to the UK financial system in taxes paid, jobs supported, and thru the home and worldwide commerce of our items and companies,” it added.
OEUK warned in its launch that “with no everlasting alternative for the momentary Power Income Levy, the nation dangers dropping 1000’s extra jobs, billions in funding, and significant provide chain functionality important for the UK’s power safety and transition”.
The business physique went on to state within the launch that it’s making the case that the EPL Levy isn’t working for presidency, business, or customers.
“The Workplace for Price range Duty (OBR) has revised down its forecast EPL income from GBP 41.6 billion ($55.4 billion) in November 2022 to GBP 17.4 billion ($23.2 billion) in its newest outlook,” OEUK famous in its launch, including that “this covers the interval 2022-23 to 2027-28”.
“That is lower than half what was forecast,” OEUK identified.
Within the launch, OEUK additionally warned that underneath the present fiscal regime business is dropping 1,000 jobs a month.
“But when the tax is reformed as OEUK proposes, the sector can; add GBP 137 billion ($182.7 billion) to the financial system by 2050, safe GBP 41 billion ($54.7 billion) of additional funding in UK power by 2050, assist 23,000 extra jobs by 2030, [and] unlock GBP 12 billion ($16 billion) in extra tax receipts by 2050,” OEUK mentioned.
OEUK highlighted within the launch that “the influence of the tax on funding and jobs is being felt by the sector’s provide chain, the ecosystem of corporations of all sizes throughout the UK that design, construct and repair every thing from wind farms and hydrogen crops to grease and fuel platforms and carbon seize initiatives and the networks connecting them”.
“It consists of operations and upkeep corporations, catering companies, and specialist excessive tech producers – from Shetland and Orkney, Inverness and Grangemouth, to Humberside and Teesside, East Anglia and the North West, and all the way in which right down to Cornwall,” it added.
OEUK famous within the launch that many corporations within the sector function multi-revenue fashions, progressing oil and fuel and renewables in tandem.
“Secure money circulation from oil and fuel underpins funding in rising alternatives corresponding to floating offshore wind and carbon seize and storage (CCS),” it mentioned.
“The assist of MPs for a predictable fiscal atmosphere is essential … to anchor these companies within the UK and ship power safety and financial development as companies construct the UK’s low carbon, excessive development power future,” it added.
Rigzone contacted DESNZ, DBT, HM Treasury (HMT), and the OBR for touch upon OEUK’s launch. In response, a HMT spokesperson mentioned, “we’re taking a accountable strategy that acknowledges the long-term function of the sector whereas exploring what follows the tip of the Power Income Levy, so companies proceed to take a position and pay their fair proportion of tax”.
“Oil and fuel will likely be with us for many years to come back, as we ship a good and orderly transition within the North Sea to drive development and safe tens of 1000’s of expert jobs, with the most important ever funding in offshore wind and three first of a sort carbon seize and storage clusters,” the spokesperson added.
The OBR declined to remark. On the time of writing, DESNZ and DBT haven’t responded to Rigzone.
In an announcement made on March 5, which was posted on the UK parliament web site, James Murray, now Chief Secretary to the Treasury, famous that the EPL was launched in 2022 “in response to extraordinary earnings made by oil and fuel corporations pushed by international occasions, together with resurgent demand for power post-Covid 19 and the invasion of Ukraine by Russia”.
“The EPL will finish in 2030, or earlier if the EPL’s worth flooring, the Power Safety Funding Mechanism, is triggered,” the assertion added.
In that assertion, Murray highlighted that HMT and HM Income and Customs had printed a session on how the oil and fuel fiscal regime “will reply to future oil and fuel worth shocks as soon as the EPL ends”. The session closed on Might 28.
To contact the creator, e-mail andreas.exarheas@rigzone.com
