North Sea Transition Deal

The people, resources, plans and commitments

Together with the UK government, our industry is on a journey to reach net zero emissions by 2050.

In 2021, we signed an agreement with the government to support this transition – the North Sea Transition Deal (NSTD).

The first of its kind by any G7 nation, the deal will help make net zero a reality by harnessing the skills and expertise of the people in our industry together with CCUS, hydrogen and decarbonising technologies. Providing energy and industrial security, the deal aims to grow the economy, sustain high-skilled jobs, establish new energy businesses, attract investment and grow exports.

While we continue to need oil and gas in the present day, we’re committed to creating a future powered by clean energy. We’re scaling up flexible electricity markets and technologies, and the North Sea Transition Deal will accelerate this process. Our industry’s expertise and the infrastructure we’ve already built will help us expand into clean energy.

The NSTD is built on five commitments:

  1. Supply Decarbonisation
    Reducing emissions from oil and gas production and helping to produce cleaner energy.
  2. Carbon Capture and Storage (CCUS)
    Applying these technologies to lead the way in helping industry and society meet net zero.
  3. Hydrogen
    Exploring how we use hydrogen to provide a potential low carbon alternative for heating, industry and transport.
  4. Supply Chain Transformation
    Helping our world-class supply chain expand and evolve to support cleaner energy production.
  5. People and Skills
    Making sure our workforce is as diverse as possible with equal opportunities for all and the skills to meet our industry’s changing needs.
  • Governance and people
  • Resources
  • Case studies
  • Our commitments

The NSTD is governed by an industry-government Deal Delivery Group.

The NSTD also provides updates to the North Sea Transition Forum which is chaired by the UK Energy Minister. OEUK provides the Project Management Office (PMO) for the NSTD. As PMO, we manage the overall progress of each commitment and coordinate the delivery of input from other bodies.

Find out more about our project team below.

By 2030, the deal will:

  • Unlock £14-16bn in private sector investment in new low-carbon energies
  • Deliver a 60mn tonne reduction in UK greenhouse gas emissions
  • Secure up to 40,000 new energy jobs
  • Ensure local supply chain accounts for 50% of input into new energy projects
  • Help the UK pivot to become a centre of low carbon excellence
  • 01. Supply Decarbonisation

    What do we mean by supply decarbonisation?

    Supply decarbonisation simply means reducing and removing carbon from our energy supply. For decades, oil and gas production has been powered by gas or diesel. To reduce carbon emissions we can use renewable energy including offshore wind to power these offshore installations. We can also decarbonise our energy supply by supporting companies’ efforts to reduce methane gas emissions by 50% by 2030 and to net zero by 2050 – thanks in part to initiatives like the industry’s Methane Action Plan and OEUK guidelines.

    Supply Decarbonisation & NSTD

    This supply decarbonisation commitment comprises two aspects: one focuses on reducing methane emissions; The other looks at ways to power offshore oil and gas production platforms using cleaner energy sources like electricity generated by low carbon energy sources (like offshore wind). This commitment is probably the most well-known, as it is in here that we have set voluntary targets for reducing our emissions;

    • 10% reduction by 2025 (achieved, we are currently on 24%)
    • 25% by 2027
    • 50% by 2030

    These targets have been set against a baseline from 2018, as a way to help us measure progress toward hitting net zero by 2050 as per the Paris Agreement. OEUK is working with the regulator, the North Sea Transition Authority (NSTA), to streamline emissions monitoring and reporting, and improve overall stewardship.

    Realising our ambition

    OEUK’s emissions report in 2023 revealed the industry has reduced its emissions by 24% since 2018, which is fantastic progress towards meeting emission reduction targets.


    Industry continues to make steady progress in reducing emissions through carrying out operational efficiencies (such as reducing business travel) and also through the decommissioning of offshore installations as they come to the end of their productive lives and therefore do not emit greenhouse gases. Finding ways to unlock more projects by using electricity to power North Sea offshore platforms could deliver further significant reductions.

    Similarly, In March 2023, the UK North Sea reached its lowest ever level of flaring and venting, as recorded by the regulator (NSTA), Flaring is down by 50% since 2018, after a 13% drop in 2022. This is encouraging progress towards reducing emissions as about a fifth of emissions from North Sea oil and gas production activities come from flaring, which is when excess gas is burned off, mainly resulting in carbon dioxide emissions.

  • 02. Carbon Capture and Storage (CCUS)

    What do we mean by CCUS?

    Carbon Capture Utilisation and Storage is a technology used to store carbon to prevent it from being released into the atmosphere. The carbon is captured by special equipment, turned into a liquid and transported to a suitable storage location. Usually, the storage is deep underground in geological formations, which is why decommissioned oil and gas wells and redundant reservoirs are ideal sites for this purpose. We have a great opportunity to use our skills and resources to help establish the UK industry is a leader in the delivery of CCUS projects both here and around the world.


    Carbon Capture & Storage (CCUS) plays an important part of the North Sea Transition Deal. CCUS is the only greenhouse gas emissions reduction technology available for heavy emitting industries including petrochemical and refineries, cement manufacture, steel manufacturing, power generation and blue hydrogen production.  The industry has committed to provide long-term investment to support CCUS and develop industry standards, as well as coordinate approaches to make sure we are as efficient as possible.

    In return, government has committed to deliver a business model to enable the transport and storage of CCUS (at scale), develop initial infrastructure and create a CCUS transport and storage asset regulatory capability. The government have also committed to create a re-use policy for oil and gas assets and coordinate offshore strategic deployment. By working together, other bodies like Offshore Petroleum Regulator for Environment and Decommissioning (OPRED), North Sea Transition Authority (NSTA) and the Crown Estates are able to support the delivery of this commitment.

    Realising our potential

    The United Kingdom is a global leader in decarbonisation with a net-zero goal by 2050 and a five-yearly carbon budget. Building on the UK’s strengths, energy technology and innovation will be at the centre of the decarbonisation policy.

    Carbon Capture & Storage also has the potential to help the UK decarbonise large parts of the industry using hydrogen. Existing oil and gas expertise including in geoscience, wells, seismic analysis, structural engineering, drilling and decommissioning can be deployed in CCUS projects.

    Our members are leading the way in developing Carbon Capture, Use and Storage infrastructure and storage facilities at scale to achieve these targets. Given the challenge, significant investment, policy development and commercial frameworks are required, supported by businesses performing at their optimum efficiency. There are great opportunities for the supply chain, including companies with expertise in design, engineering, fabrication and commissioning.

    CCUS in action

    Following recent government announcements, there are 8 emitter projects who can proceed to engage in commercial negotiations with track 1 transport and storage clusters – Hynet  in the North West and North Wales and the East Coast Cluster on Teesside and the Humber. The next two track 2 cluster projects expected are Acorn in North East Scotland and Viking CCS. The UK sector has leaped forwards with progress in CCUS, and it is expected that first storage will happen sometime around 2026.

  • 03. Hydrogen

    What do we mean by Hydrogen?

    Low-carbon hydrogen is expected to play a key role in the UK’s route to Net Zero. According to government, hydrogen has the potential to make up to 20-35% of UK energy demand by 2050. The UK follows a twin-track approach, simultaneously supporting the production of CCUS-enabled hydrogen produced from natural gas, also known as “blue” and electrolytic or “green” hydrogen.

    The benefits of hydrogen include:

    • using it as a low carbon fuel to support the decarbonisation of industrial users, particularly those that may find electrification unfeasible
    • providing energy for the power, heat and transport sectors
    • flexibility as a means of storing energy in periods of excess renewable power generation

    Our strong oil and gas heritage, together with our world-leading engineering capabilities and the potential to repurpose existing energy assets make the UK an ideal place to kickstart the hydrogen economy.

    Hydrogen & NSTD

    Through the North Sea Transition Deal, OEUK is working with members to deliver the ambition for 10GW of low carbon hydrogen production capacity by 2030. Our offshore energy sector is positioned to enable the production of low-carbon hydrogen at scale as part of a long-term competitive market.

    OEUK’s members have strengths in building and operating energy infrastructure such as oil and gas pipelines and terminals. Through the NSTD our companies are sharing insights and lessons learned from successfully operating this infrastructure for decades which can be useful when building new or repurposing existing transportation networks to hydrogen.

    The NSTD commits industry to create low carbon hydrogen production, support research and development, support offshore hydrogen production, continue with the hydrogen safety programme and understand public opinion of hydrogen.

    The Government has committed to also support research and development, create a revenue mechanism, structure the market for hydrogen demand and accelerate the hydrogen planning process.

    Realising our ambition

    OEUK is committed to working with governments and industry to:

    • Enable a legislative, regulatory and financial framework for the UK’s nascent hydrogen sector by anchoring a long-term funding mechanism that provides certainty to investors, project developers and supply chain companies.
    • Build on our supply chain strengths and support local content development.
    • Work with government to develop a strong foundational commercial framework to kickstart the sector, attract private investment and position the UK as a world-leader in hydrogen.

    OEUK’s Hydrogen Forum brings together over 80 members, including hydrogen production, transport and storage developers, technology developers, technical and safety representatives, data companies and certification bodies. The forum addresses key priorities for the sector, unblocking regulatory barriers and developing key enablers through positive and constructive engagement with policymakers and regulators.

  • 04. Supply Chain Transformation

    What do we mean by supply chain transformation?

    The offshore energy industry has a world-class supply chain which has served the needs of the oil and gas sector for over 50 years. Supply chain transformation is about working together to help businesses develop engineering, manufacturing services and technology expertise to support the energy transition. It’s about creating a globally competitive energy supply chain with great export potential.

    The NSTD expects industry to deliver a low carbon supply chain that is best in class and whose learnings and technology may be exported to other countries and sectors seeking to develop low carbon energies.

    Supply Chain Transformation & NSTD

    The NSTD expects industry to deliver a low carbon supply chain with international repute, meaning we can be best in class to export our learnings to other countries and sectors seeking to develop low carbon energies. Within the deal, there is a requirement to understand the capability and capacity of the UK currently, to ensure it develops the right resources to deliver low carbon energy in the future.

    Part of the NSTD includes appointing a supply chain champion to represent industry at government and global levels. We are delighted that Sian Lloyd Rees has taken up this role, and has successfully stood up for the sector on numerous occasions. Ms. Lloyd-Rees supports OEUK in representing energy businesses, helping to ensure these companies develop the clean and innovative energy technologies that will help move the UK towards a low carbon future.

    Her priority is ensuring that UK firms are in an early strong position to compete and win contracts for new UK energy projects. It is estimated that 40,000 supply chain jobs will be created in the UK by 2030 through the North Sea Transition Deal, in areas such as carbon capture, hydrogen production and the conversion of offshore oil and gas installations to run on electricity.

    Realising our ambition

    OEUK has done some mapping work to understand our capabilities and capacity in various energy sectors, starting with CCS and floating offshore wind.

    Part of this commitment also touches on improving contracting behaviours. OEUK’s supply chain principles seek to embed ten positive behaviours about commercial behaviours. A key element of the Supply Chain Principles is adhering to the Government prompt payment code, which expects payments to be made to suppliers in 30 days. This has successfully been embedded across the sector, and work is ongoing to measure adherence to this, as required in the NSTD.

    The Global Underwater Hub (GUH) is a fine example of what’s being done to achieve supply chain transformation and a key deliverable of the Deal. GUH does strong work representing the industry’s community with subsea expertise, which is crucial for the future energy landscape.

    A further part of this commitment is around innovation – using technology to realise our potential. This particular focus has been picked up by the Technology Leadership Board (TLB) as part of Net Zero Technology Centre (NZTC) and it released a report in Q4 2022 about progress.

  • 05. People and Skills

    What do we mean by People and Skills

    People are at the heart of our industry, driving forward innovation in technology and ways of working. Having the right people with the right training and skills at the right time is critical for us to achieve our net zero ambitions.

    Our oil and gas industry supports over 200,000 good skilled jobs across the length and breadth of the UK.

    The energy landscape is changing, and the future industry will be a blend of wind, Hydrogen, CCS, decommissioning as well as oil and gas. We are not standing still. Our industry includes those that are expanding into renewables, while the homegrown expertise of our people is driving ever cleaner energy production. The industry expertise and infrastructure we have built up provides the foundation for supporting the expansion into new energy sectors. Our people help provide secure and reliable energy to millions.

    We hold ourselves to account as an industry to ensure we are as diverse, inclusive and equitable as possible with our current and future workforce. Equal opportunities and high employment standards should be the backbone of our sector.

    People and Skills & NSTD

    To realise our ambitions, and ensure the right skills are in place to deliver the energy transition, the NSTD brings together a number of actions, including the future skills demands in developing energy sectors, mapping career paths to facilitate entry to and transfer between sectors, supporting research in lower carbon activities, and removing possible barriers movement by supporting the development of a skills passport (an OPITO led project).  OEUK is involved in promoting cross sector collaboration in the skills agenda, increasing focus and reducing duplication as well as promoting local content and pressing for government decisions that encourage investment in both oil and gas and renewables, especially offshore wind.

    Realising our ambition

    Maximising inclusion of under represented groups will be key to achieving our ambitions.  OEUK has released a suite of documents to support companies in improving their diversity, equality and inclusion offering. These documents have been developed as a result of workforce and employers’ surveys which identified the actions to focus on. This continues to be a priority area in 2024.

Working together, producing cleaner energies