Powering our Net Zero Future – the Energy White Paper 2020

On 14 December 2020, the UK government published its long-awaited Energy White Paper setting out its vision for a transition to clean energy by 2050. In the introduction to the white paper, Secretary of State for Business, Energy and Industrial Strategy, Alok Sharma MP, states that “Our success will rest on a decisive shift away from fossil fuels to using clean energy for heat and industrial processes”.

The white paper follows on from the Ten Point Plan for a Green Industrial Revolution recently announced by Boris Johnson which set out the Prime Minister’s blueprint to invest in clean energy, transport, nature and technology to create and support “up to 250,000 British jobs”.

The government’s plans in relation to the oil and gas sector have the overarching goal of transforming the sector in order for the UKCS to become a net zero basin by 2050. Many of the plans set out in the white paper have already been announced including:

• To provide opportunities for oil and gas companies to repurpose their operations away from unabated fossil fuels to abatement technologies such as carbon capture utilisation and storage or clean energy production.
• To agree a North Sea Transition Deal to deliver new opportunities, jobs and skills as well as protecting wider communities which rely on the sector.
• To work with regulators to reduce emissions from oil and gas operations, including through the OGUK Roadmap 2035.
• To reduce flaring and venting in the UKCS, including through a commitment to the World Bank’s Zero Routing Flaring by 2030 initiative. The government has stated that it will work with regulators to try to eliminate routine flaring as soon as possible.

The white paper also addresses the refresh of the Oil and Gas Authority’s strategy which has now been laid before parliament (see our Law-Now on this here). The white paper acknowledges the OGA’s proposals which were set out in its consultation on its strategy review and the fact that these proposals could have a role to play in achieving the government’s net zero goals. The strategy will bolster the OGA’s ability to focus the sector on delivering net zero emissions.

The government announced on 3 September 2020 that it would conduct a review of the UK offshore licensing regime (see our previous Law-Now on this here). The white paper states that the government is “currently undertaking a review of policy on the future licensing of domestic offshore oil and gas exploration and production.” The review is intended to allow government to show that the UK’s climate change goals are compatible with a strong economy and energy security. Part of this review may include formalising aspects of the existing licensing process and adding in a new requirement to regularly seek independent advice on how future license rounds would impact the government’s climate goals before proceeding with those rounds. The government has stated that such a step could provide extra assurance that the licensing regime remains consistent with the government’s wider climate policy. The government expects to publish the conclusions of its review in early 2021.

The white paper can be accessed here. See our Law-Now covering other key aspects of the white paper here.