The UK government has launched a consultation on the design of a highly anticipated new “climate compatibility checkpoint” for new licensing rounds.
The Conservative-led Westminster government promised it would introduce the new checkpoint when it unveiled the North Sea Transition Deal with industry in March.
The checkpoint will be designed to ensure any future oil and gas licensing rounds are aligned with the UK’s legally binding target of becoming a carbon neutral economy by 2050.
However, even before the consultation, environmental groups have been critical over expectations it would not be retrospective and would not cover oil and gas developments that are already licensed but awaiting sanction.
UK Energy Minister Greg Hands said: “This new checkpoint will be key to our plans to support the oil and gas sector during its net zero transition.
“It helps safeguard the future of this vital UK industry as we create more opportunities for green jobs and investment across the country.”
The consultation will run until 28 February and any interested parties have until then to scrutinise the plans and give their views.
The proposals published on Monday set out a series of possible tests that could be used to assess new licences, including domestic oil and gas demand, the sector’s projected production levels, the increasing prevalence of clean technologies such as carbon capture and hydrogen generation, and the sector’s continued progress against emissions reduction targets.
Andy Samuel, chief executive of the Oil & Gas Authority (OGA), said: “We welcome the launch of this consultation.
"Alongside the net zero test the OGA is applying to our decisions such as field developments, these proposals recognise the important role of industry in helping meet the UK’s energy needs while accelerating the energy transition to net zero."
After a review, the UK government concluded in March that continued licensing for oil and gas was not "inherently incompatible" with the UK’s climate objectives but it was acknowledged that this may not always be the case in future.
The decision not to employ the checkpoint retrospectively for proposed but unsanctioned developments under licences already awarded is based on the government's view that the UK already has a "robust, multi-layered" regulatory system in place for licences.
This includes having to go through an environmental impact assessment, as well as a public consultation, and rigorous scrutiny from both the OGA and the Offshore Petroleum Regulator for Environment & Decommissioning, or Opred, which is the environmental regulator.
The OGA’s revised strategy, which came into effect in February, also calls for operators to consider "net zero" across any project’s lifecycle.
Trade body Oil & Gas UK (OGUK) said it hoped the checkpoint will provide “welcome transparency” and called for it to be robust enough “to be able to stand up to challenge”.
Katy Heidendreich, OGUK supply chain & operations director, said: “Our sector strongly supports the UK government’s ambition to demonstrate international leadership in delivering a just transition to net zero emissions by 2050.
“The UK’s domestic oil and gas industry has a critical role in maintaining the country’s energy security, being a major contributor to our economy and the sector’s skills, experience and investment will be key to delivering a successful energy transition at pace.”
The publication of the consultation follows Siccar Point Energy's decision earlier this month to suspend the development of the Cambo oil and gas field after partner Shell said it would not invest in the scheme following intense opposition from environmental campaigners, including Greenpeace.
Greenpeace UK’s policy director Doug Parr said: “The government has produced some detailed, concrete suggestions for various tests that might be favoured by industry, but not on actual compatibility with the climate crisis we’re in, where it is infuriatingly vague.
“Can the carbon emitted by burning oil and gas from new fields be made to fit within our carbon budget? The International Energy Agency say no, as we already have too much oil and gas to take us beyond the globally agreed benchmark of 1.5C temperature rise, and the government’s climate advisors agree. The oil and gas industry, however, disagree.
“A real climate compatibility test would bring an end to new oil and gas licences, and accelerate our progress towards cleaner energy and a just transition for oil and gas workers. If the UK wants to make any claim of climate leadership, it’s hard to see how it can do anything else.”