UK government stepping up environmental scrutiny for future offshore license rounds

Dec. 20, 2021
Britain’s government has opened a consultation on a proposed ‘climate compatibility checkpoint’ for UK offshore E&P.

Offshore staff

LONDON – Britain’s government has opened a consultation on a proposed ‘climate compatibility checkpoint’ for UK offshore E&P.

The government had committed to introduce the checkpoint earlier this year as part of the North Sea Transition Deal agreed with the industry, supporting the UK oil and gas’ transition to a lower carbon future.

Under the proposal, the checkpoint will be applied prior to each future oil and gas licensing process to ensure new licenses are awarded on solely on the basis that they comply with the UK’s climate change pledges, including net zero emissions by 2050.

The consultation details tests that could be used to assess new licenses, including domestic demand for oil and gas; the sector’s projected production levels; growth of ‘clean’ technologies such as carbon capture and hydrogen generation; and the sector’s progress in fulfilling emissions reduction targets.

Based partly on the responses, the checkpoint will then be implemented to assess potential future license awards.

If evidence suggests a future licensing round would undermine the UK’s climate goals or ability to reach net zero, the government added, it would not go forward.

The new measure is on top of measures that already apply to UK oil and gas developments, including the environmental assessment carried out by the Offshore Petroleum Regulator for Environment and Decommission, and the net zero impact assessment conducted by the Oil and Gas Authority as part of its consent process for issuing new licenses.

Katy Heidendreich, Oil and Gas UK (OGUK) supply chain & operations director, said: “Our industry welcomes the transparency that a checkpoint for future BEIS licensing decisions provides. It is vital that this checkpoint is robust and ensures that future licensing rounds are compatible with the UK’s climate change ambitions, while maintaining investor confidence in the UK continental shelf.”

OGUK will provide a full submission to the consultation exercise, which closes on Feb. 28, 2022.