The UK stands to lose a significant portion of the potential £450 billion offshore energy market by 2040 without stable energy policies and a globally competitive tax regime, warns Offshore Energies UK (OEUK).
According to OEUK’s 2024 Business and Supply Chain Outlook report, oil and gas projects alone could generate £145 billion for the UK’s supply chain. Additionally, new offshore wind farms are projected to create £260 billion worth of work, with new hydrogen projects contributing £25 billion and carbon capture and storage (CCS) technology bringing in £34 billion.
The report highlights that the existing oil and gas supply chain possesses 60%-80% of the necessary capabilities to develop these new energy technologies. However, current policy uncertainties and political rhetoric pose significant challenges to scaling up these firms and capitalizing on the opportunities presented.
With favorable conditions, the UK offshore energy sector could tap into a global export market exceeding £1 trillion within the next 15 years, potentially generating thousands of new jobs and billions in revenue for the UK economy.
To unlock these benefits and attract investment, OEUK emphasizes the importance of introducing supportive policies and maintaining a globally competitive tax environment. The industry manifesto outlines key steps for the government to partner with the industry in protecting jobs, ensuring energy security, and delivering cleaner and more affordable energy for the UK.
OEUK CEO David Whitehouse emphasized the urgency of the situation, stating, “The UK has a £450 billion domestic energy opportunity that could transform the economy and support jobs – but warning lights are flashing.” He stressed the need for stability, predictability, and fair returns to build a low-carbon future and retain jobs in the UK.
Whitehouse emphasized the importance of responsible management of the UK’s oil and gas production, which has seen record lows. He noted that the UK’s world-class oil and gas sector have already reduced emissions by 24% since 2018, highlighting the need to build on this achievement in transitioning to a low-carbon future.
In the face of declining wholesale energy prices and the imperative to achieve net zero emissions, OEUK urges policymakers to create an environment conducive to investment and innovation in the UK’s offshore energy sector.