Recommendation 7

HM Government · verbatim extract Accepted in Part

The government partially agrees with this recommendation. We recognise the importance of building long-term stability and certainty in the oil and gas tax regime. Autumn Budget 2025 announced that a new OGPM will replace the EPL when it ends in March 2030, or earlier if the EPL price floor triggers. A summary of stakeholder responses to the March 2025 consultation on the OGPM was also published alongside the Budget. The OGPM will adopt a revenue-based approach and deliver a fair return to the UK public when oil and gas prices are unusually high. The rate of the new tax will be 35%, For the 2026/27 tax year, the threshold prices which must be exceeded for the new tax to activate are $90/barrel (oil) and 90p/therm (gas). These thresholds will be adjusted annually in line with inflation. The government will also legislate for OGPM in next year’s Finance Bill to give the oil and gas sector further certainty and reassurance EPL is temporary. When the EPL ends, the headline rate of the tax regime will return to 40%, along with the introduction of the new OGPM which will only apply when prices are unusually high. Conclusion 8 We welcome the Government’s publication of updated guidance on environmental impact assessments for new oil and gas fields, providing greater certainty to the sector. Given that each application will be considered on a case-by-case basis and the Government has not shared how factors will be weighted in its assessment, transparency surrounding the process could be improved, especially as this is an area of public interest. (Conclusion, Paragraph 75) Each individual project will be considered on its merits, in line with the applicable Regulations and relevant guidance. When reaching a decision as to whether agreement should be given to the grant of consent the Secretary of State will consider the environmental effects of the project (as required by the Offshore EIA Regulations) and will form a view of the overall balance of advantage between any potential significant effects on the environment and wider benefits to the interests of the nation and any other relevant factors in proceeding with the project. In reaching this view the Secretary of State will usually consider, amongst other matters, the severity, extent, understanding and duration of the significant effects, the Government’s overall energy and environmental objectives, and the potential economic and other advantages of the project proceeding. This includes an assessment of the extent to which the project aligns with the Government’s stated objectives for the future of the North Sea The EIA process already provides transparency. Relevant environmental information received from developers is subject to public notice where appropriate, to enable representations to be made by the public and civil society, and factored into the decision-making process. Once the Secretary of State has reached a decision, the developer will be notified and the decision published which will set out reasons for the decision.