Offshore Energies UK, the trade body representing the North Sea oil and gas sector, has called on the government to eliminate the current windfall tax earlier than planned and replace it with a narrower levy. The organization is seeking to have the existing energy profits levy, introduced in 2022, scrapped by 2027 rather than the originally scheduled 2030 date. Under the proposed alternative, the oil and gas revenue levy would impose a 35% tax on revenue only when prices exceed a specified threshold.
The industry group is advancing this request amid expectations of another winter characterized by elevated energy prices and household bills reaching their highest levels since Russia’s invasion of Ukraine. Gas wholesale prices recently climbed to their peak since the 2022 crisis, and major energy companies have reported substantial profits following recent geopolitical developments. OEUK contends that accelerating the tax change would encourage significant investment in North Sea operations and support employment in the region.
The organization projects that implementing the change earlier could generate approximately £50 billion in investment and yield up to £14.9 billion more in tax revenue over the next decade compared to current projections. However, a substantial portion of the projected tax gains would derive from employment created by additional investment rather than direct levies on energy firms themselves. OEUK also is urging ministers to approve two major projects, Rosebank and Jackdaw, and to pursue a broader deregulatory approach toward the sector.
The push for tax relief faces opposition from environmental and social advocacy organizations, which have previously called for strengthening windfall tax provisions to fund cost-of-living assistance. Greenpeace and other campaign groups argue that loosening taxation on fossil fuel producers during a period of record profits and energy price volatility is inappropriate, particularly given climate considerations and consumer financial pressures.
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