UK Government Charts Course for a ‘Prosperous and Sustainable’ Transition from North Sea Oil and Gas

The UK government has launched a landmark consultation, aiming to place the North Sea at the epicenter of Britain's clean energy revolution. This initiative is set to drive economic growth, secure energy independence, and reshape the future of offshore industries—ushering in an era of hydrogen, carbon capture, and wind power dominance.

In a strategic move, the government seeks to establish the North Sea as a world leader in green energy while ensuring a carefully managed transition for the oil and gas sector. This plan provides long-term fiscal certainty, confirming that the Energy Profits Levy will cease in 2030 while opening discussions on a new investment framework to support jobs and economic resilience.

Crucially, the proposal guarantees that existing oil and gas fields will remain operational for their entire lifespan, preventing economic shocks while facilitating a shift toward sustainable industries. The government’s commitment to ending new exploration licenses aligns with global climate goals, ensuring a measured transition that safeguards both employment and environmental targets.

The consultation underscores the government’s dedication to attracting private sector investment into emerging technologies—paving the way for tens of thousands of new jobs in offshore renewables. A robust offshore wind industry, carbon capture, and hydrogen initiatives could see the clean energy workforce soaring to 70,000 and 138,000 by 2030. Meanwhile, a fully operational carbon capture sector is projected to inject an astonishing £5 billion annually into the UK economy by 2050.

Scotland is already reaping the benefits of this vision, with £55.7 million allocated to the Port of Cromarty Firth to accelerate the deployment of floating offshore wind farms. This investment ensures that critical infrastructure remains within the UK, fortifying domestic energy security and insulating households from volatile fossil fuel prices.

Energy Secretary Ed Miliband said:  The North Sea will be at the heart of Britain’s energy future. For decades, its workers, businesses, and communities have helped power our country and our world.

The North Sea Transition Authority (NSTA) may undergo a structural transformation, adapting its role to regulate oil and gas and the burgeoning offshore hydrogen and carbon storage sectors. The government aims to craft a regulatory framework that aligns with its ambitious clean energy vision, facilitating an orderly and profitable transition.

Further steps include refining environmental regulations to provide industry certainty following a Supreme Court ruling requiring a more comprehensive assessment of emissions linked to oil and gas projects. This will enable developers to resume applications for already-licensed initiatives, balancing environmental concerns with economic continuity.

The UK has taken decisive steps in this transition, committing unprecedented investment in offshore wind and allocating up to £21.7 billion over the next 25 years for carbon capture and hydrogen development. The establishment of Great British Energy, headquartered in Aberdeen, alongside creating a National Wealth Fund, underscores the government’s determination to cement Britain’s status as a clean energy superpower.

The UK government has also consulted on revised environmental guidance for offshore oil and gas projects. A response is expected soon, providing long-awaited clarity to the industry and allowing developers to resume applications for consent on already-licensed projects. This follows a landmark Supreme Court ruling mandating regulators to account for the full impact of oil and gas combustion—Scope 3 emissions—within Environmental Impact Assessments for new developments.

Exchequer Secretary to the Treasury, James Murray, said:  We are committed to working together with the sector on the future of the North Sea by providing the stability they need to keep investing and supporting jobs across the country while ensuring they make a fair contribution at times of unusually high prices.

Tania Kumar, Net Zero Director, CBI, said: The North Sea has long been a cornerstone of the UK’s energy sector and will continue to play a vital role in securing energy independence and transitioning to a low-carbon economy. Today’s consultations highlight the government’s commitment to a managed transition. Success hinges on our collaboration with communities, workers, and businesses to develop a practical plan.  

As Britain navigates its transition toward a net-zero future, the role of the North Sea Transition Authority becomes increasingly pivotal. The UK’s net-zero economy is outpacing broader economic growth, reinforcing the urgency of managing the shift away from fossil fuels while ensuring energy security, industrial resilience, and sustainable job creation.

Dhara Vyas, CEO of Energy UK, said: Today’s announcement offers a positive step toward a just transition for offshore workers. The North Sea has been an engine of economic growth and energy security for the UK, but it’s critical to ensure pathways are available for offshore workers to transition to the low-carbon industries of the future. The government has sent a strong signal about the UK’s clean energy future and the role the North Sea will continue to play in fostering clean technologies such as offshore wind, hydrogen, and carbon capture and storage. The clean energy mission can help ensure the North Sea’s best days are ahead of it, powering economic growth and enabling the UK to lead the way in the global clean industrial revolution.

David Whitehouse, Chief Executive, OEUK, said: The UK offshore energy industry, including its oil and gas sector, is responsible for thousands of jobs across Scotland and the UK, and today, the government has committed to meaningful consultation on the long-term future of our North Sea. That is important and welcomed. Energy policy underpins our national security – how we build a clean energy future and leverage our proud heritage matters.

The government’s twin consultations—one addressing the North Sea’s evolving role in clean energy and the other shaping a taxation framework responsive to oil and gas price volatility—set the stage for long-term investor confidence. A predictable and stable regulatory environment is essential, not just for attracting capital but also for sustaining the communities and workers whose livelihoods are intertwined with the energy sector.

Rachel Solomon Williams, Executive Director, Aldersgate Group, said:  The private sector recognises the growth opportunity of the clean energy transition alongside the risks associated with investments that are incompatible with the 1.5C target. This consultation is an important step on the path to building a prosperous and resilient economy with wider benefits across all regions of the UK. Investing in assets that risk becoming stranded is sustainable for neither the UK economy nor the environment – the government’s recognition of this position will contribute to resolving uncertainty and building private sector confidence for clean energy investments in the region.   

The North Sea workforce possesses a wealth of expertise honed over decades. These skills are highly transferable to clean energy industries. With targeted upskilling initiatives, these workers can seamlessly transition into offshore wind, hydrogen, and carbon capture projects. The government’s commitment to leveraging the region’s industrial strengths ensures that economic opportunities remain local, fostering a just and inclusive energy transition.

Dan McGrail, Chief Executive of RenewableUK, said:  The biggest offshore wind farms in the world are being built in the North Sea, and even more ambitious projects are being planned. Offshore wind is at the very heart of the government’s mission to reach clean power by 2030 and net zero by 2050, and the industry also offers the UK one of its biggest opportunities for job creation, industrial regeneration, and economic growth.

The North Sea is already a cornerstone of the UK’s energy system, and its role will only expand in the years ahead. Offshore wind isn’t just a cleaner alternative—it’s a game-changer for energy security, shielding billpayers from the unpredictability of global fossil fuel markets. Additionally, this sector presents a massive opportunity for skilled workers, offering a pathway for those currently employed in oil and gas to enter a thriving, forward-looking industry.