In an announcement posted on Offshore Energies UK’s (OEUK) web site, OEUK CEO David Whitehouse commented on the Autumn Funds, which was introduced to parliament on October 30 by UK Chancellor of the Exchequer Rachel Reeves.
“We heard the Chancellor acknowledge the function of the oil and gasoline sector to help prime quality jobs and strengthen the UK’s power safety,” Whitehouse stated within the assertion.
“We welcome that and the conferences and dialogue which have taken place between trade and the brand new authorities,” he added.
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“Whereas the federal government will enhance and prolong the Vitality income levy on oil and gasoline manufacturing to a headline charge of 78 % and take away the related funding allowance, the 100% first-year allowance and the decarbonization allowance will likely be retained. The Chancellor additionally confirmed that the EPL will fall away in March 2030,” he continued.
“Nevertheless, with a rise in tax regardless of commodity costs at current lows, there is no such thing as a hiding that it is a troublesome day for the sector,” Whitehouse went on to state.
Within the assertion, Whitehouse famous that “oil and gasoline firms, our world class provide chain, and our extremely expert individuals will help the power transition” and warned that “we is not going to achieve success with out them”.
“It’s why there’s a completely different path for this trade which may ship the power future all of us agree on,” he stated within the assertion.
“With trade and authorities working in partnership we will defend the North Sea as a nationwide financial asset. It may well and will function an engine to comprehend UK financial development and local weather objectives,” he added.
Whitehouse famous within the assertion that the group welcomes that the federal government will seek the advice of in early 2025 on how the oil and gasoline tax regime can encourage funding and reply to modifications within the oil worth. He stated the group additionally notes the session on finish use emissions for oil and gasoline initiatives.
Within the assertion, OEUK highlighted that 154,000 jobs are straight or not directly associated to offshore power and revealed that 120,000 of those are straight or not directly supported by oil and gasoline initiatives.
OEUK additionally famous within the assertion that the UK imports round 40 % of its power wants and that UK power manufacturing is on the lowest it has ever been. The UK will get three-quarters of its complete power from oil and gasoline, in accordance with the assertion.
Rigzone has contacted HM Treasury and the UK Division for Vitality Safety and Web Zero for touch upon OEUK’s assertion. On the time of writing, neither have responded to Rigzone’s request but.
In her Autumn Funds speech, which was transcribed on the UK authorities web site, Reeves stated, “we dedicated to reform the Vitality Income Levy on oil and gasoline firms”.
“I can affirm in the present day that we are going to enhance the speed of the levy to 38 %, which can now expire in March 2030 … and we are going to take away the 29 % funding allowance,” Reeves added.
“To make sure the oil and gasoline trade can defend jobs and help our power safety … we are going to keep the 100% first yr allowances and the decarbonization allowances too,” Reeves continued.
Reeves additionally stated, “to deliver new jobs to Britain and drive development throughout our nation … we’re delivering our mission to make Britain a clear power superpower”.
“Earlier this month, we introduced a big multi-year funding between authorities and enterprise into Carbon Seize and Storage … creating 4,000 jobs throughout Merseyside and Teesside,” Reeves added.
“At this time, I’m offering funding for 11 new inexperienced hydrogen initiatives throughout England, Scotland and Wales – they are going to be among the many first industrial scale initiatives anyplace on the planet,” Reeves went on to state.
Reeves additionally stated within the speech, “we are going to set up GB Vitality … offering funding subsequent yr to arrange GB Vitality at its new residence in Aberdeen”.
The Vitality Income Levy was launched in Could 2022 to tax the extraordinary income of oil and gasoline firms working within the UK or the UK Continental Shelf, a coverage paper revealed on the UK authorities web site on October 30 said.
In July 2024 the federal government introduced that the speed of the Vitality Income Levy would enhance, that the Funding Allowance could be abolished, and that the capital allowances and Decarbonization Funding Allowance could be reviewed, with remaining particulars set out at Autumn Funds 2024, the paper added, noting that stakeholder engagement was carried out over the summer season of 2024.
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