Energy Transition Outlook 2021

ENERGY TRANSITION OUTLOOK 2021

The North Sea Transition Deal The UK North Sea Transition Deal (NSTD), the first by a G7 country, will accelerate the energy transition, reduce UK emissions, and create new jobs across the UK. The Deal represents an agreement between government and industry to deliver a net zero future and to place the oil and gas sector at the centre of the transition to net zero. The NSTD will help maximise the energy potential of the North Sea, supporting a range of new energy opportunities and providing up to 60 per cent of the potential sources of emission reduction on the pathway to net zero. 18

As well as reducing emissions from production, the Deal sets out how the sector will contribute to decarbonisation of the wider economy, in particular through investments in CCUS infrastructure and in the production of hydrogen to substitute for some of the existing uses of oil and gas in the economy. Over the period to 2030 the Deal is expected to deliver around £15 billion of additional investment into UKCS, on top of that required to contribute to meeting ongoing oil and gas demand. Around 40,000 incremental jobs will result from this investment. These jobs will be across construction, operation and the supply chain and there is an aspiration to achieve 50 per cent UK content over the lifecycle of all related new energy projects, including 30 per cent locally provided technology content. The agreement of the NSTD provides for a stable future for the UKCS consistent with the net zero objectives of the government and wider society. This includes both diversification into important new activities offshore, including renewable and carbon capture and storage, and the ongoing production of oil and gas with consistently lower emissions from production. The pathway to a zero-carbon basin By 2050 the UK Continental Shelf is expected to be CO 2 negative in the sense that any emissions from production, processing and combustion of oil and gas will be more than offset by the opportunities for carbon capture. Currently Scope 1-3 emissions, which include those from the whole value chain are around 250 million tonnes p.a. with the majority of these from end use of oil and gas.

The UK North Sea Transition Deal, the first by a G7 country, will accelerate the energy transition , reduce UK emissions, and create new jobs across the UK

North Sea Transition Deal

The Deal will require an internationally competitive and level playing field as part of a broader energy framework

Carbon Capture & Storage enabling large parts of UK industry and society to eliminate emissions

Hydrogen providing a realistic alternative for heating, heavy industry, and transport

Supply decarbonisation cutting upstream Oil and Gas industry emissions through an ambitious production emissions reduction programme

Infrastructure delivery will be made reality through capability-related commitments that underpin the growth of the UK economy

Supply chain transformation developing expertise that underpins energy-sector wide export growth from the UK, creating a globally competitive energy supply chain of international repute

People & Skills securing, stimulating, and creating tens of thousands of high quality jobs in industrial heartlands

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