UK replaces windfall oil tax with consultation on clean energy future

Britain announced that it will end the windfall taxes on North Sea oil producers by 2030, and replace them with a new mechanism for responding to price increases. It is pushing ahead with its plan to turn the North Sea into an energy hub.

On Wednesday, the government held two consultations. One was on how to transform the North Sea into a clean-energy area, while another focused on how taxes would be applied when energy prices were high. This will give producers more certainty about future tax rates.

Oil and gas producers claim that the windfall tax, which was introduced three years ago, when prices were surging, has wiped out profits. This has accelerated the decline of North Sea basin.

Ed Miliband, the Energy Minister, said that oil and natural gas production would continue to be an important part of the energy mix. He also stated that after the consultation the government had committed to maintaining the existing fields throughout their lifespan.

The government wants to create new jobs by promoting clean energy sources, such as wind, hydrogen and carbon capture. (Reporting and writing by Muvija M., Sam Tabahriti. Editing by Sachin R. Ravikumar.)

(source: Reuters)