In a launch despatched to Rigzone by the Offshore Energies UK (OEUK) crew on Thursday, OEUK revealed that it has issued an open letter to Sarah Jones, the UK Minister of State on the Division for Power Safety and Internet Zero (DESNZ) and the Division for Enterprise and Commerce, on behalf of the UK offshore power provide chain.
“We have a look at proposals to extend the EPL (Power Income Levy); prolong its time period; and scale back the speed of capital allowances with grave concern that these can be a blunt response which might undermine the levers to long run options and jeopardize jobs in communities throughout the UK,” the letter – which was signed by 42 corporations together with Bilfinger UK, Weatherford UK, and Wooden – acknowledged.
“The businesses investing in nascent alternatives like floating offshore wind and CCS (carbon seize and storage) would require the cashflow from a secure and predictable oil and fuel enterprise to fund these alternatives,” the letter added.
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“Enough funding within the UK power transition can solely occur if we help, not undermine our home oil and fuel sector,” it continued.
“It’s vital that the brand new authorities demonstrates precise dedication to working in partnership with the sector to safe continued funding and to ship on guarantees to safeguard jobs,” the letter went on to state.
Within the launch, OEUK CEO David Whitehouse, mentioned, “provide chain corporations are the spine of the UK’s offshore power trade and have powered the nation for final 50 years”.
“To harness the total potential of those world class UK corporations for the following 50 years there is no such thing as a easy alternative between oil and fuel or renewables. The truth is that we’ll want each to help these corporations, energy the nation, and develop the financial system,” he added.
Whitehouse famous within the launch that the letter exhibits the extent of concern felt by provide chain corporations in regards to the authorities’s new tax proposals.
“It additionally exhibits a transparent want to be represented within the process forces and councils figuring out industrial coverage,” he mentioned.
“If oil and fuel operators reduce exercise because of the proposed adjustments to the Power Revenue Levy, it has a direct influence on our world class provide chain. The influence of the EPL adjustments shall be felt far more broadly than oil and fuel operators who pay the tax instantly,” he added.
“We are going to depend on these British companies of all sizes to ship a homegrown power transition, which is the trail to financial progress, power safety and internet zero,” he continued.
“The federal government has dedicated to working in partnership with trade. It’s vital this sector is represented within the teams figuring out industrial coverage and that the federal government appreciates the influence that their proposed tax adjustments could have on the availability chain, which is chargeable for a lot of the 200,000 jobs supported by this sector,” Whitehouse went on to state.
Rigzone contacted DESNZ and HM Treasury for touch upon the OEUK issued letter and OEUK’s launch.
In response, a HM Treasury spokesperson instructed Rigzone, “we’re strengthening the earlier authorities’s windfall tax to make sure North Sea oil and fuel producers contribute their justifiable share in the direction of our power transition”.
“Our plans for a brand new Nationwide Wealth Fund and Nice British Power will create 1000’s of latest jobs within the industries of the longer term,” the spokesperson added.
DESNZ has not but responded to Rigzone on the time of writing.
In an announcement despatched to Rigzone earlier this month, OEUK highlighted that the UK Exchequer Secretary to the Treasury, James Murray, “co-hosted a fiscal discussion board at Offshore Energies UK’s Aberdeen workplaces with senior trade leaders”.
“The influence of adjustments to additional prolong and lift the Power Income Levy, or windfall tax, and the potential removing of vital capital allowances for the sector had been central to discussions,” OEUK mentioned in that assertion.
To contact the writer, electronic mail andreas.exarheas@rigzone.com
