Out-Law / Your Daily Need-To-Know

Consultation launched on new UK oil and gas climate checkpoint

Out-Law News | 05 Jan 2022 | 1:38 pm | 1 min. read

The proposed checkpoint would help ensure any new oil and gas licences are only awarded to projects if they comply with the UK’s climate change commitments and its target of reaching net zero emissions by 2050.

The proposed checkpoint would help ensure any new oil and gas licences are only awarded to projects if they comply with the UK’s climate change commitments and its target of reaching net zero emissions by 2050.

The government said that if evidence from the checkpoint suggested that a future licensing round would undermine the UK’s climate goals it would not go ahead.

The new consultation lists a range of potential tests that officials could use to assess new licenses, including domestic demand for oil and gas, the sector’s projected production levels, the increasing prevalence of clean technologies, and the sector’s performance against emissions reduction targets.

It comes after a review by the Department for Business, Energy and Industrial Strategy (BEIS) concluded that, although current licensing practices are compatible with the UK’s climate objectives in principle, a formal climate compatibility checkpoint should be established to ensure that compatibility is always evaluated.

The proposed checkpoint would represent an additional layer of scrutiny for future licence applications, on top of the environmental assessment carried out by the Offshore Petroleum Regulator for Environment and Decommission (OPRED), and the net zero impact assessment carried out by the Oil and Gas Authority (OGA).

The government said the checkpoint would enable oil and gas to provide important security for the UK’s energy mix, and to be used for the production of many everyday essentials like medicines and plastics, whilst minimising emissions.

Dr Andy Samuel, chief executive of the OGA said: “We welcome the launch of this consultation.”

“Alongside the net zero test the OGA is applying to our decisions such as field developments, these proposals recognise the important role of industry in helping meet the UK’s energy needs while accelerating the energy transition to net zero,” he added.

The consultation is open until 28 February 2022.