This week marks one year since the UK government and the oil and gas industry agreed the landmark North Sea Transition Deal to support the sector’s transition to cleaner energy. As part of this transition, the government is continuing to back the North Sea oil and gas sector to ensure security of supply, while also boosting the UK’s renewables sector to generate more clean, cheap energy in the UK and reduce exposure to volatile global gas markets.

The Deal agreed in March 2021 set a clear path for the decarbonisation of the oil and gas sector, and was the first deal of its kind by a G7 country, demonstrating the UK’s global leadership in supporting the oil and gas industry in our transition to net zero by 2050 and maintaining the UK’s strong security in energy supply.

The North Sea oil and gas industry has the skills and expertise to drive forward key parts of the government’s Ten Point Plan and Net Zero Strategy, including in the production of low-carbon hydrogen and roll out of new carbon capture projects.

The North Sea Transition Deal: One Year On report published today highlights the progress made in the past year across the 5 key areas of the Deal:

  • supply decarbonisation
  • carbon capture, usage and storage (CCUS)
  • hydrogen
  • supply chain transformation
  • people and skills

These include a reduction in carbon emissions from offshore oil and gas production, which have fallen by 11% since 2018 - equivalent to taking around a million cars off the road for the year - and the delivery of a £1 million electrification competition to drive forward the electrification of oil platforms to cut emissions. This demonstrates how sourcing gas locally in the North Sea has less of a carbon footprint than importing gas from abroad.

In addition, the government has advanced energy policies that will reduce the UK’s reliance on fossil fuels, including setting out its strategy to develop a thriving low carbon hydrogen sector in the UK, and developing carbon capture in the UK, selecting 2 carbon capture clusters to support for deployment in the mid-2020s, which will be the first clusters to have the opportunity to benefit from the government’s £1 billion CCUS Infrastructure Fund.

Speaking at the North Sea Transition Forum in Aberdeen, Energy Minister Greg Hands said:

'Since our ambitious North Sea Transition Deal was agreed a year ago, we have made great progress to support the oil and gas industry and ensure a transition which safeguards energy security, jobs and expertise.'

'We will continue to build on this progress and back our North Sea sector to maximise domestic production as we transition to cheap, clean, home-grown energy.'

The oil and gas sector has also made clear progress in delivering on their commitments in the Deal. Industry has appointed a Supply Chain Champion, helping the industry secure new economic opportunities within the lower carbon energy sector, and are progressing a Supply Chain Strategy to support the wider industry supply chain to align with the energy transition. They have also delivered a Methane Action Plan, setting out the path for industry to reduce methane emissions.

Chief Executive of Offshore Energies UK Deirdre Michie said:

'The North Sea Transition Deal is a transformative partnership which has already made great strides this past year to harness the expertise of our offshore oil and gas industry in helping the UK meet its climate ambitions of achieving net zero greenhouse gas emissions by 2050. '

'We have already seen great examples of the Deal in action – from the appointment of a Supply Chain Champion to tangible reductions in production emissions and good progress on industry electrification projects.'

'We are excited to see what next year brings, as this industry continues to work together with government to safeguard UK energy security, secure tens of thousands of jobs and support the country’s transition to a net zero economy.'

UK government Minister for Scotland Malcolm Offord said:

'It’s encouraging to see just how much progress we’ve made in the year since the North Sea Transition Deal was signed. Emissions are falling, we’re making advances in carbon capture and striding ahead in the production of energy from sustainable means such as wind and hydrogen.'

'We’re proud to be working with the oil and gas industry to harness the great skills in the North Sea to sustain high-quality jobs, create new opportunities and ensure security of our domestic energy supply.'

While the UK is driving down demand for fossil fuels on the path to net zero, there will continue to be ongoing demand for oil and gas over the coming decades. It is crucial that the UK has a domestic source of oil and gas to maintain energy security, preventing reliance on imports, particularly from Russia.

The Deal is a key part of how the UK government is supporting the managed transformation of the industry, to protect the nation’s energy security, support high-value jobs, and safeguard the expertise necessary to achieve a lower carbon future.