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Britain’s trade body for the offshore energy industry, Offshore Energies UK (OEUK), has disclosed the results of its survey, which indicate that the Energy Profits Levy (EPL) needs to be tweaked from next year to unlock investments in the offshore energy arena. Findings of OEUK’s Pulse Survey highlighted that more than half (55%) of the UK’s offshore energy firms, encompassing 97 companies and business units across Britain’s offshore energy sector, reduced their staff headcount in the past year, as included in OEUK’s Budget Representation, submitted to the UK’s Treasury on behalf of industry to help inform policy decisions ahead of the Chancellor’s statement on November 26. The outlook is perceived to remain challenging, with nearly half (45%) of surveyed companies expecting to cut jobs further over the next 12 months if the current policy environment continues, as the survey also demonstrated a growing trend of companies shifting focus overseas. While one respondent claims to be “actively looking to reduce exposure to the UK energy industry and move operations overseas, reducing UK economic activity and tax take (personal and PAYE),” another warned that the ability to provide support to net zero was “in jeopardy due to rapid decline of baseline hydrocarbon revenues.” Britain’s trade body for the offshore energy industry emphasizes that its proposal to reform the Energy Profits Levy in 2026 is a key part of its submission and is supported by its membership of over 420 companies spread across the UK, as winds of change need to sweep over the nation’s regulatory and fiscal realms for Britain to ensure that its offshore energy sector will continue to support 200,000 jobs and add £137 billion in value to the economy by 2050. Read more: UK Clean Energy Plan Outlines Major Workforce Expansion, with Offshore Wind Among Key Job Drivers Sheena McGuinness, Co-Head of Energy and Natural Resources at RSM UK, noted: “I welcome Offshore Energies UK’s proposal to reform the Energy Profits Levy from 2026. This tax is not fit for purpose and is damaging UK business investment and jobs, which means lower revenues to the Exchequer. “The UK is the only country that continues to levy a windfall tax on energy profits, where there is no windfall left to tax. We must reset this tax so firms have the confidence to build our integrated energy future at home rather than looking overseas.” Based on OEUK’s recent findings, the sector will continue to lose 1,000 direct and indirect jobs each month between now and 2030, with losses concentrated in industrial hubs from Aberdeen to Shetland, Grangemouth to Teesside, and beyond, with expected revenues downgraded from £42 billion to less than £17 billion since the windfall tax introduction and further decline also forecast. Since the UK is estimated to import over 40% of its energy, with higher emissions, fewer jobs, and no UK tax benefit, Offshore Energies UK claims there is another way that Britain should explore to preserve jobs, boost investment, and support climate ambitions, which can be accomplished by replacing the temporary EPL with a permanent, profits-based mechanism in 2026, not 2030. As a result, Britain’s trade body for the offshore energy is convinced that such a move will restore investor confidence and unlock £40 billion in new capital investment, enabling the delivery of committed funding for carbon capture and storage (CCS), hydrogen, and offshore wind, and addressing transmission charges to enable the launch of clean energy projects at scale. According to OEUK, the United Kingdom should also anchor and grow its supply chain, committing to at least 50% local content and supporting communities across the country, while protecting 160,000 jobs in oil and gas by 2030, with an additional 23,000 direct and indirect roles, as it builds the workforce needed for the future. Offshore Energies UK is urging the government to reform the EPL and provide a stable, competitive fiscal regime; deploy the previously announced funding for CCS, hydrogen, and renewables; and ensure a pragmatic approach to North Sea licensing and regulatory certainty for ongoing and future projects, including supporting projects like Rosebank and Jackdaw. Katy Heidenreich, OEUK’s Director of Supply Chain and People, underlined: “This survey underlines that the Energy Profits Levy isn’t working for government, industry or consumers and needs urgent reform. The government’s Office for Budget Responsibility has revised down its forecast revenue from £41.6bn in November 2022 to £17.4bn for the period 2022-23 to 2027-28. This is less than half what was forecast. “But if this tax is reformed as OEUK proposes, the sector can add £137bn to the economy by 2050, secure £41 billion of extra investment in UK energy by 2050, support 23,000 additional jobs by 2030 and unlock £12 billion in additional tax receipts by 2050. So, it’s not just offshore energy firms, our industrial heartlands and their skilled people that need this tax to change – it’s the whole economy.” An OEUK-commissioned poll recently showed that 50% of UK adults and 63% in ‘red wall’ constituencies support continued domestic oil and gas production alongside renewables to reduce reliance on energy imports during the energy transition. With this in mind, Dave Whitehouse, OEUK’s CEO, called for a fiscal reform and investment ahead of the Autumn Budget, while calling for collaboration to “de-polarise the energy policy debate” and support reindustrialization through domestic energy development.
