Ahead of the Comprehensive Spending Review (CSR) Offshore Energies UK is asking the Chancellor to prioritise major UK energy projects to unlock economic growth and safeguard jobs, net zero and energy security.
Carbon Capture and Storage (CCS) is a key technology for decarbonising UK industry for which the CSR could unlock fresh business investment and jobs. The Humber’s Viking and Northeast Scotland’s Acorn projects have the potential to invest over £25bn by 2035 with private sector capital, potentially creating over 30,000 jobs.
Acorn is the only project of its type in Scotland and is critical for futureproofing a variety of industrial, power and energy production companies to meet climate goals and prevent further deindustrialisation.
Located in the Humber, the UK’s most industrialised region and largest emitter of Co2, the Viking CCS project will create thousands of jobs in the region and play a vital role in supporting the UK to meet its target to capture 30 million tonnes of Co2 annually by 2030.
OEUK has also urged government to deploy up to £7.5 billion in the Contracts for Difference (CFD) scheme to grow floating and fixed offshore wind over the next three auction rounds (AR7 – AR9) and help industry meet Clean Power 2030 targets. The government is expected to open AR7 this summer.
While the CSR addresses departmental spending and not revenue-raising plans, OEUK said a competitive fiscal regime for oil and gas remains essential to an ever-integrating industry, which is one of the UK’s most important economic assets.
Industry needs globally competitive tax and licensing regimes for oil and gas so the UK can lessen its reliance on imports and sustain jobs, supply chains and economic value as it scales up renewables.
The CSR should help the UK’s offshore energy and other industrial sectors unlock economic growth and strengthen supply chains while developing world leading companies.
Today, the UK offshore energy sector supports over 200,000 jobs in oil and gas alone and generated £25 billion in gross value add in 2023. Harnessing the potential of the UK’s existing and emerging energy sector could increase this value much further.
David Whitehouse, OEUK’s CEO says:
“These are critical times and our sector can help government lay a credible path to economic growth. This starts with support for homegrown energy.
“We must work together to unlock business investment across UK energy opportunities. This includes the build out of renewables alongside the responsible production of oil and gas.
“We are asking Government to deploy the previously announced funding for carbon capture and storage and announce a clear funding envelope for Track-2 and beyond.
“This is needed so key projects like Acorn in Scotland and Humber-based Viking can go ahead, create jobs, help British industry decarbonise and importantly invest in Britain.
“In a country that’s importing over 40% of its energy, we need more wind, hydrogen, oil and gas, and CCUS projects built here. This is investment the country needs for growth.”
OEUK’s CSR asks:
- Unlock private sector investment in carbon storage and capture, offshore fixed bottom wind, offshore floating wind, and hydrogen.
- Provide a clear long term funding envelope as part of the Government’s Clean Power 2030 goals to deliver the potential of these technologies.
- Provide efficiently resourced departments and efficient regulators to progress opportunities and activity at pace.
- Support UK specialist technology hubs to drive the technology and innovation required for a successful homegrown energy transition.
- Support expansion of the Skills Passport and cross sector skills demand planning to ensure that the UK has the skilled people to deliver on the offshore energy growth opportunity
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