A report by the North Sea Transition Taskforce has called on the government to urgently establish a long-term, integrated plan to deliver a just energy transition in the North Sea.
The North Sea is a mature oil and gas basin. To reach the UK’s net zero goals, there will be a transition in the North Sea from oil and gas exploration towards commercially viable renewable energy technologies.
The North Sea Transition Taskforce, an independent body supported by the British Chambers of Commerce, was launched in November 2024 to map out this transition for the North Sea.
Bringing together representatives from supply chain organisations, industry bodies, government agencies, academia, environmental groups and trade unions, the taskforce has published its report called Securing the future of the energy transition in the North Sea.
The report highlights that a successful, just transition will guarantee energy security, hasten the journey towards net zero and protect the workforce linked to the North Sea.
However, it points out that a faster-than-expected decline in oil and gas production – with renewable projects not yet fully developed – will risk a rapid erosion of the North Sea’s infrastructure and damage a world-leading supply chain and skilled workforce. This would be to the detriment of the UK’s economy.
The report warns that if this gap is allowed to open, there will be no viable industry left to transition over – and the window of opportunity is closing fast.
Philip Rycroft, chair of the taskforce, said: “The North Sea Transition Taskforce has established beyond doubt that there are widespread concerns that a gap is opening up between the North Sea as it is now and as it might be.
“The government needs to act now to restore investor confidence in the future of the North Sea, treat this as a national mission and put in place a long-term and coherent plan for a just transition.”
The report makes three key recommendations:
Replace the current windfall tax with a more stable, predictable and viable tax regime for North Sea oil and gas. The windfall tax regime – known as the energy profits levy (EPL) – was put in place by the previous government in May 2022 in response to surging oil and gas prices to help support households struggling with spiking energy prices in the wake of Russia’s invasion of Ukraine. In last year’s Autumn Statement, the EPL was increased to 35%, with the treasury announcing it would remain in place until 2028 unless oil and gas prices fell for a sustained period.
Create a government-led, cross-agency North Sea Transition Committee to develop a clear regime for the regulation of extraction and exploratory drilling for the remainder of the projected life of the North Sea as a viable oil and gas basin, including licensees’ environmental obligations.
Develop a long-term framework of government support for large-scale investment in low-carbon technology, including offshore wind, both fixed and floating; carbon capture, usage and storage; and hydrogen.
Shevaun Haviland, director general of the British Chambers of Commerce and executive director of the taskforce, said: “The geopolitical world around us is changing at a frightening rate. If we manage the transition well, it will provide a plentiful and reliable source of renewable energy and give the UK much greater security and economic stability.
“The cost of getting this wrong is too great to ignore. The Scottish and UK governments must join forces and work to protect this hugely valuable resource for future generations.”
Dr Sally Uren OBE, taskforce member and executive director of Forum for the Future, said: “Among the report’s recommendations is a long-term, large-scale investment in low-carbon technology, and ensuring that the continued (and planned) oil and gas extraction is in line with the UK’s net zero commitments.
“Only then can we secure a prosperous, fair and secure future for the North Sea; one that delivers for workers, businesses, communities and the planet.”
Earlier in March 2025, the government confirmed it will maintain the ban on new drilling licences for the North Sea as it looks to shift production over to other offshore industries such as hydrogen, carbon capture and wind power.