Select committee: Scottish Affairs Committee
Conclusion 17
4th Report - The future of Scotland’s oil and gas industry
Published 24 Oct 2025
Addressed to Scotland Office
Scottish Affairs Committee GB Energy and the net zero transition All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The Grangemouth case is the energy transition’s canary in a coalmine. It has illustrated the need for Government’s active stewardship in the energy transition. Petroineos advised the Committee that the UK and Scottish governments were aware of its plans to cease operations at the refinery five years ago. Both the UK and Scottish governments should have acted sooner to prepare for the resulting job losses and set in motion a feasibility study for future industries at the site at a much earlier point. This lack of action created an employment gap and trauma for the local community that could have been avoided. Petroineos, in collaboration with the Government, local authorities and trade unions, ought to have produced a comprehensive exit plan. (Conclusion, Paragraph 124) 58
From: Scottish Affairs Committee, 4th Report - The future of Scotland’s oil and gas industry (HC 459), 24 October 2025
Government response
The government responded to the whole report on 16 January 2026 (deadline 24 December 2025).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government welcomes the report and says it "partially agrees" with several recommendations, pointing to its North Sea Future Plan and 2025 Budget as setting out many of the issues the Committee raised.
- On licensing, it states that issuing new exploration and production licences "would not help our energy security", and instead introduces Transitional Energy Certificates for some production adjacent to already licensed fields, with no exploration permitted.
- On tax, it "partially agrees" with the call to bring the successor regime in sooner: the Energy Profits Levy is to end by March 2030 at the latest, or earlier if the price floor is triggered, and a new Oil and Gas Price Mechanism will replace it.
- It "agrees" with the recommendation on a communications campaign, saying an industry-led campaign on clean energy job opportunities is "launching next year".
- On the Oil and Gas Transition Training Fund, it says it will extend the fund from 2026-7 to 2028-9 with up to £18 million jointly funded with the Scottish Government, but has "considerable fiscal sustainability concerns" about a hypothecated fund from oil and gas tax revenues.