THE oil lobby has been accused of a “brass neck” after calling for the windfall tax to be scrapped just days after energy firms reported billions in profits.
At a press briefing for Offshore Energies UK (OEUK), the rebranded trade group formerly known as Oil and Gas UK (OGUK), on hydrogen energy, the industry group suggested they would want to see the windfall tax “fall away”.
It comes just days after BP posted record-breaking profits of £23 billion, Shell £33bn and Equinor £23.8bn, while many households in the UK are still facing unaffordable energy bills, and with government support likely to be dropped in April.
READ MORE: Two-thirds of Scots reject 'de facto referendum' on independence
The 25% Energy Profits Levy, introduced by Rishi Sunak during his time as chancellor, increased to 35% in January and is expected to run until March 2028, rather than the end of 2025.
While the levy applies to profits made from extracting oil and gas, firms can claim tax savings worth 91p out of every £1 invested in fossil fuel extraction in the UK.
Meanwhile, OEUK touted hydrogen as the next big industry but admitted that it would require “a heck of a lot” of licenses for natural gas production, something scientists and climate activists have warned must stop if global warming is to be brought under control.
At a virtual briefing hosted by the trade association, the attendees were asked how they have seen the “investment in climate change after seeing the windfall tax introduced”.
Mike Tholen, OEUK’s sustainability director, and former Shell employee, said he didn’t believe the windfall tax continuing was “vital”.
He said: “A number of companies across the whole business pool are scratching their heads on the nature, the basin and the nature of confidence as we look to the Budget.
“We're very clear we would like to have some signals that as windfalls fall away, the tax falls away, so will the price trigger.
“That remains part of investors trying to understand the nature of the regime, the nature we're trying to invest in. So I think there's still going to be some caution on investment until we get through the Budget and understand what the longer-term thinking is.”
Tholen added that he preferred energy and government “engaging together” rather than government fiscal “dictats”.
READ MORE: Fergus Ewing 'doing Alister Jack's bidding' in DRS row, Greens say
During the briefing, OEUK were also asked about the scale of production needed on the UK continental shelf to get the hydrogen industry off the ground, with much of the focus evidently on blue hydrogen, which is produced from fossil fuels.
Will Webster, OEUK’s energy policy manager, said that the UK currently only produces half the natural gas it needs, and has to import the rest.
He said: “So even if we didn't do any hydrogen at all, we probably need every bit of gas we can find in the UK CS just to do gas let alone hydrogen.
“I wouldn't say it made any difference really, to how much more gas we need, because we still need a heck of a lot of natural gas.
“We can start using that as hydrogen if we make some of the changes that we've been talking about today. So I kind of look at it a bit that way round, rather than say we're gonna need more gas as a result, because we need all the gas we've got anyway.”
Earlier in the briefing, Webster said that the hydrogen industry would require a “steady flow of gas production licenses”.
Freya Aitchison, Friends of the Earth (FoE) Scotland oil and gas campaigner, said the windfall tax was already an “insufficient attempt” at clawing back “obscene profits” from energy companies.
She said: “It takes an incredible brass neck for the oil industry to call for an end to the windfall tax just after they have posted all-time profit highs.
“The public will not fall for the fossil fuel industry’s claims that the windfall tax is damaging their business.
READ MORE: Chinese spy balloons may have 'already flown over UK airspace'
“Companies such as Shell, BP and Equinor all posted record-breaking profits even with the introduction of the windfall tax, and now they are advocating for it to be lifted so that they can pocket these profits while millions struggle to pay their energy bills.”
Aitchison also blasted the “deliberate loophole” in the windfall tax allowing companies tax breaks for investing in new oil and gas.
She added: “This shows a complete disregard for the climate as well as a clear prioritisation of the interests of these polluters over those of ordinary people. The windfall tax must be enhanced and the loophole closed, not weakened even further as industry lobbyists would like to see.
"Instead of allowing bosses and shareholders at these big polluters to get even richer, we must chart a clear path away from oil and gas and towards an energy system that is built on more affordable, reliable renewables.
“Politicians must listen to the science which tells us that to meet climate targets in a fair way, fossil fuel extraction needs to be phased out in the next decade.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel