HSE & Sustainability

North Sea Transition Deal Brings Government, Industry Together

The plan is designed to facilitate progress toward net-zero-emissions targets by focusing on the government’s 10-point plan for a green industrial revolution.

North Sea Oil Platforms at Sunset, Cromarty Firth, Scotland
North Sea oil rigs moored in Cromarty Firth, Scotland, at sunset.
Credit: Christopher Ames/Getty Images.

The UK government announced on 24 March that it has agreed to a partnership with the UK oil and gas industry to tackle climate change and deliver key aspects of its 10-point plan. The deal is the first of its kind by any G7 country, aiming to blaze a trail for oil- and gas-producing countries to move toward a lower-carbon future in a way that supports the economy, jobs, and energy communities.

The deal was agreed between UK Business and Energy Secretary Kwasi Kwarteng on behalf of the UK government and Oil and Gas UK (OGUK) Chief Executive Deirdre Michie on behalf of industry.

“Today, we are sending a clear message around the world that the UK will be a nation of clean energy as we build back better and greener from the pandemic,” Kwarteng said. “We will not leave oil and gas workers behind in the United Kingdom’s irreversible shift away from fossil fuels. Through this landmark sector deal, we will harness the skills, capabilities, and pent-up private investment potential of the oil and gas sector to power the green industrial revolution, turning its focus to the next-generation clean technologies the UK needs to support a green economy.”

Developed in partnership OGUK, the North Sea Transition Deal outlines more than 50 government and industry actions to accelerate moves toward the government’s target of net zero emissions by 2050.

“The North Sea Transition Deal is a transformative partnership which will harness the expertise of the UK offshore oil and gas industry to urgently meet the country’s climate ambitions of net zero emissions by 2050,” Michie said. “It will unlock billions of pounds of investment and see government and industry work together to deliver a homegrown energy transition, realizing innovative low-carbon solutions that can be exported globally.”

Key commitments in the North Sea Transition Deal include

  • The sector setting early targets to reduce emissions by 10% by 2025 and 25% by 2027 and has committing to cut emissions by 50% by 2030.
  • Joint government and oil and gas sector investment of up to £16 billion by 2030 to reduce carbon emissions. This includes up to £3 billion to replace fossil-fuel-based power supplies on oil and gas platforms with renewable energy, up to £3 billion on carbon capture usage and storage (CCUS), and up to £10 billion for hydrogen production.
  • By 2030, the sector will voluntarily commit to ensuring that 50% of its offshore decommissioning and new energy technology projects will be provided by local businesses, helping to anchor jobs to the UK.
  • The appointment of an industry supply chain champion who will support the coordination of local growth and job opportunities with other sectors, such as CCUS and offshore wind.

The deal will help

  • Unlock up to £16 billion in investment over the next decade in crucial low-carbon solutions, including CCUS and hydrogen.
  • Support the creation of up to 40,000 new energy jobs in industrial heartlands across the UK.
  • Cut UK emissions by 60 million tonnes, with 15 million tonnes of reductions from industry production by 2030, the equivalent of annual emissions from 90% of the UK’s homes.
  • Boost the world-leading infrastructure—carbon capture—the Committee on Climate Change says is necessary to tackle climate change.
  • Kickstart hydrogen in the UK, building a platform to provide an alternative for heating, heavy industry, and transport.
  • Ensure energy communities such as Aberdeen and Teesside can successfully transition, retaining jobs and skills and creating a more diverse and inclusive workforce.

The deal comes after OGUK published Roadmap 2035: A Blueprint for Net Zero in 2019 and was one of the first industry responses to the government’s climate-change commitments.

“We need to urgently end our reliance on fossil fuels, and, through our pioneering North Sea Transition Deal, we will do so without putting our economy and communities at risk,” UK Energy Minister Anne-Marie Trevelyan said. “While the future oil and gas sector will look very different to how it does today, the industry, businesses, and supply chains it supports will have a new mission to help the UK decarbonize and develop the clean technologies of the future as we lead the green industrial revolution.”