A report published by the Energy Council has suggested that the North Sea Transition Authority (NSTA) would need a ‘fundamental reimagining’ under a potential Labour government.
Senior Portfolio Manager at the Energy Council Charlie Abrines wrote that Labour’s Green Prosperity Plan and its focus on transitioning the UK energy industry away from fossil fuels means the NSTA’s role would need to change.
“Labour’s focus on climate change and net zero commitments underscores the need for a fundamental reimagining of existing regulatory obligations, including the role of the North Sea Transition Authority (NSTA),” he stated.
“While the NSTA is tasked with maximising the net economic value from oil and gas extraction, Labour’s emphasis on climate considerations may necessitate revisions to existing legislation, such as removing the maximum economic recovery obligation.”
Labour’s Green Prosperity Plan aims to help the UK energy industry transition away from fossil fuels toward renewable and sustainable energy sources.
However, the plan has been criticised for including plans to increase the windfall tax on energy company profits from 75% to 78% and extend the levy’s life until the end of the next parliament (from its current end in March 2028).
It would also scrap investment relief provisions in the tax. The party has also pledged not to issue any new oil and gas licences.
Energy industry figures have criticised the plan, warning it could destroy the UK oil and gas industry, slash hundreds of millions of dollars of value from portfolios and lead to thousands of job losses.
Labour aimed to balance this by committing to spend £28 billion per year on green projects. However, it later cut this £23.7bn per year.
The NSTA’s revised Strategy from 2021 added net zero as one of the organisation’s central obligations, requiring the oil and gas industry to help the UK government meet its 2050 net zero target.
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