Energy Secretary Ed Miliband has unveiled the government's North Sea strategy, maintaining the ban on new oil and gas licences while permitting limited drilling on existing fields through "tie-back" projects.
Transitional drilling approach
Following his return from the Cop30 climate conference in Brazil, where he championed the UK's commitment to ending new fossil fuel licences, Miliband confirmed the government would stick to its manifesto pledge. However, the strategy introduces "transitional energy certificates" that will allow new drilling on or near existing North Sea fields.
These "tie backs" will enable a small amount of new fossil fuel extraction, which the government argues will help maintain the economic viability of existing infrastructure throughout its operational lifespan.
Environmental concerns and analysis
Environmental campaigners have responded cautiously to the announcement. Tessa Khan, executive director of environmental nonprofit Uplift, stated: "This government is right to end the fiction of endless drilling. The North Sea is an ageing basin, with most of the gas already burned, and new licensing will do nothing to stem the decline in jobs."
Analysis from Uplight, based on North Sea Transition Authority and Rystad data, reveals that new discoveries within a 30-mile radius of existing production sites contain just 25 million barrels of oil and another 20 million barrels' worth of oil equivalent in gas.
This contrasts sharply with the controversial Rosebank oilfield, which awaits an imminent decision and would involve extracting nearly 500 million barrels of oil and gas-equivalent over its lifetime.
Budget measures and transport policies
In the accompanying autumn budget, Chancellor Rachel Reeves announced several significant energy and transport measures:
- Fuel duty frozen until September next year
- New EV tax of 3p per mile, increasing with inflation
- Green levies shifted from bills to general taxation
The fuel duty freeze, maintained by every chancellor since 2010, has cost the exchequer more than £130 billion according to Social Market Foundation estimates. Research shows the policy disproportionately benefits wealthier households while failing to incentivise switching to electric vehicles or public transport.
Colin Walker, head of transport at the Energy and Climate Intelligence Unit, warned: "The government risks sending mixed signals and undermining consumer confidence by trying to encourage drivers into EVs with one policy and possibly putting them off with another."
Energy bill changes and industry response
The movement of green levies to general taxation will remove approximately £2.3 billion annually from energy bills for three years starting in April, saving average households about £150 per year.
However, this will be partially funded by scrapping the ECO scheme for energy efficiency upgrades in poorer households, raising concerns about support for fuel-poor families.
Despite intense lobbying from oil and gas companies, Reeves maintained the energy profits levy until 2030, expected to raise £2.7 billion in 2025-26, though this represents a 40% decrease from the previous year, signalling the North Sea's declining production.
Environmental groups welcomed the government's resistance to industry pressure while calling for more ambitious climate action and support for workers transitioning to clean energy sectors.
