UK oil and gas sector ‘must it must do more’ to meet 2030 emissions target

UK oil and gas sector ‘must it must do more’ to meet 2030 emissions target

6 Oct    Finance News, News

UK oil and gas companies need to do more if they are to meet an official target of halving their emissions from fossil fuel extraction by the end of the decade, the North Sea regulator has warned.

The North Sea Transition Authority (NSTA) said it would set out proposals to help give fossil fuel companies a greater focus on their climate pledges amid concerns the targets would be missed without further action.

The firms promised to slash the emissions caused during the production of oil and gas as part of a deal struck with government in 2021 to secure billions of pounds in state help for the sector.

This year the government granted more than 100 new North Sea exploration licences and gave the green light to develop the huge Rosebank oilfield.

The NSTA warning is the latest to cast doubt on the UK meeting its legally binding climate targets given government announcements of plans to delay the ban on combustion engines in new vehicles and the phaseout of gas boilers, and to water down home energy efficiency standards.

The watchdog’s proposals will form part of an industry consultation to “encourage oil and gas operators to take action today”. The industry is under pressure to reduce emissions from oil and gas production, which accounts for about 3% of total UK greenhouse gas emissions.

Last month, a NSTA report found the industry was on track to meet the interim emission reduction targets of 10% by 2025, and 25% by 2027, compared with 2018, but added that “bold measures” would be required to halve emissions by 2030.

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“Significant progress has been made, but there is more work to be done and the NSTA estimates that without further initiatives, the 2030 emissions reduction target agreed between government and industry as part of the North Sea transition deal may be missed,” the regulator said this week.

The government’s transition deal earmarked more than £8bn in public funds to support the industry as it prepared to play a role in the UK’s ambition to develop carbon capture technology and hydrogen production. In exchange, the industry promised to cut its emissions and use UK-made components for 50% of their decarbonisation projects.

The NSTA said the industry risked losing its “ongoing social licence to operate”, which allowed companies to keep drilling for oil and gas even while the UK moved away from fossil fuels, unless it could meet its longer term climate targets.

Philip Evans, a climate campaigner for Greenpeace UK, said the industry’s operational emissions were “the mere tip of the iceberg” compared with those produced by using fossil fuels, which accounted for more than 80% of the total emissions from drilling, extracting and burning oil and gas.

“This is why [Rishi] Sunak’s plan to ‘max out’ North Sea reserves is a grave mistake,” Evans said.

“The government’s deliberate disregard for the majority of the emissions from these climate-wrecking projects is completely reckless and the reason we’re fighting them in two separate court cases.

“And, unless it revokes the recently approved licence for Rosebank, we’re likely to be back for a third.”

A government spokesperson said: “Through our landmark North Sea transition deal agreed between the UK government and industry, we are backing the decarbonisation of the oil and gas sector while supporting tens of thousands of jobs across Scotland and the wider UK.

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“While our plans to power up Britain include significant investment in new renewable and nuclear projects, the transition to non-fossil forms of energy cannot happen overnight and, even when we’re net zero, we will still need some oil and gas, as recognised by the independent Climate Change Committee.”

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