Source · Select Committees · Scottish Affairs Committee
4th Report - The future of Scotland’s oil and gas industry
Scottish Affairs Committee
HC 459
Published 24 October 2025
Recommendations
1
Accepted in Part
Increase government investment to create clean energy jobs matching North Sea oil and gas losses.
Recommendation
We are concerned that clean energy jobs are not being created at the pace or scale required to match the heavy job losses arising from the decline of the North Sea oil and gas sector. The scale-up of clean energy …
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Government Response Summary
The government partially agrees, highlighting the Clean Energy Jobs Plan aims to nearly double clean energy jobs by 2030 with £63 billion capital funding. It also points to the North Sea Future Plan and Transitional Energy Certificates to ensure a managed transition and retain skilled workforces.
Scotland Office
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4
Accepted in Part
Implement pragmatic North Sea licensing policy and clarify additional drilling permissions for developers.
Recommendation
The Government should set out how it intends to address the issue of the North Sea oil and gas industry’s decline outstripping the scale-up of clean energy. We urge the Government to take a pragmatic approach to its licensing policy …
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Government Response Summary
The government agreed to a pragmatic approach by introducing Transitional Energy Certificates, which will permit specific additional drilling activity, such as infill wells or tie-backs, in areas adjacent to existing fields to maximise their lifespan.
Scotland Office
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5
Accepted
Set out plans to increase proportion of UK-based supply chains for clean energy generators.
Recommendation
We recognise that maximising economic return from clean energy investments requires supporting and expanding UK-based supply chains. (Conclusion, Paragraph 56) The Government should set out how it intends to increase the proportion of UK-based supply chains used by clean energy …
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Government Response Summary
The government agrees with the recommendation and outlines four new policy interventions from its North Sea Future Plan to support and expand UK-based supply chains. These include establishing a North Sea Future Board, developing guidance, a Basin Wide Plan, and leveraging GBE's £1bn Supply Chain Fund.
Scotland Office
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7
Accepted in Part
Commit to urgent publication and early implementation of the new North Sea fiscal regime.
Recommendation
In its response to this report, the Government should commit to a publication date for the outcome of its consultation on the new fiscal regime. To provide much-needed clarity and confidence to the sector, the successor regime should be brought …
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Government Response Summary
The government partially agrees, providing significant detail on the new Oil and Gas Fiscal Regime (OGPM), including its 35% rate, activation thresholds from 2026/27, and commitment to legislate next year. However, it confirms the OGPM will replace the Energy Profits Levy from March 2030 (or earlier if triggered), rejecting the recommendation to implement it sooner.
Scotland Office
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9
Accepted in Part
Commit to issuing explanatory statements detailing how oil and gas applications are balanced.
Recommendation
We recommend that the Government commit to issuing an explanatory statement after assessing each application, setting out how it has balanced the environmental impact against the economic and energy security benefits of oil and gas fields in its assessment. A …
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Government Response Summary
The government partially agrees, stating that once a decision is made, it will be published with reasons. However, it does not explicitly commit to a detailed explanatory statement outlining the balance between environmental, economic, and energy security factors for each application as requested.
Scotland Office
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12
Accepted in Part
Commit to publishing a long-term North Sea energy transition plan with measurable skills transfer outcomes.
Recommendation
The Government should recognise the urgency of the need for a coherent plan for the North Sea by committing to dates for the publication of its consultation response and consequent transition plan. The transition plan should be long-term in scope, …
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Government Response Summary
The government partially agreed, stating it has published the 'North Sea Future Plan' and will establish a minister-led 'North Sea Future Board' by early 2026, with community representation, to oversee the transition. While committing to monitoring clean energy jobs, it did not explicitly commit to all specific measurable outcomes like target figures for skills transfer within the plan.
Scotland Office
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14
Accepted in Part
Clarify inter-governmental delivery, duration, and long-term financing for the Oil and Gas Transition Training Fund.
Recommendation
The forthcoming transition plan should set out how the UK and Scottish governments will work together to deliver the Oil and Gas Training Transition Fund. It should clarify the duration of the funding available and the degree of UK Government …
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Government Response Summary
The government partially agrees, announcing the Oil and Gas Transition Training Fund will be extended until 2028-29 with up to £18m jointly funded by UK and Scottish governments, and opportunities for private investment will be explored. However, it explicitly rejects using Energy Profits Levy revenues for long-term funding due to fiscal sustainability concerns.
Scotland Office
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15
Accepted
Ensure clear communication campaigns for oil and gas workers on energy transition job opportunities.
Recommendation
There has been a failure of communication from consecutive governments to oil and gas workers about the transition and what they need to do to prepare and benefit from it. Government action is required to ensure the visibility and promotion …
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Government Response Summary
The government outlined several specific actions to improve the visibility and promotion of clean energy jobs, including a UK-wide awareness campaign, a deep dive into priority occupations, the Destination Nuclear campaign with a careers portal, and recent clean energy jobs fairs.
Scotland Office
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16
Accepted
Conduct a communications campaign informing oil and gas workers about energy transition job opportunities.
Recommendation
As part of its North Sea transition plan, we recommend that the Government conduct a communications campaign about the scale of the energy transition and the employment opportunities available, directed at both oil and gas workers and new entrants to …
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Government Response Summary
The government agrees, committing to lead a UK-wide industry-led awareness and attraction campaign for clean energy jobs, launching next year. A strong communications approach will be embedded within the North Sea programme, with the North Sea Jobs Service providing job boards, apps, and job-matching to help workers transition.
Scotland Office
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18
Accepted
Establish principles for a just industrial transition drawing on lessons from the Grangemouth case.
Recommendation
In its response to this report, the Government should outline what has been learned from this case and what can be done to ensure that comparable industrial transitions will be better managed in future. Having consulted trade unions and communities …
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Government Response Summary
The government agrees with the recommendation, affirming its commitment to a fair and equitable transition for workers and communities. It will commence a "Future of Fuels programme" and launch a call for evidence to inform the UK's long-term strategy for the downstream oil sector, which will guide future transition management and support jobs and communities.
Scotland Office
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20
Accepted in Part
Explain National Wealth Fund decision-making, Grangemouth taskforce role, and project criteria.
Recommendation
The Government should explain in its response to this report how its taskforce on regulatory recommendations will feed into decisions taken by the National Wealth Fund. The Government should make clear the role and influence of the Grangemouth Investment Taskforce …
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Government Response Summary
The government partially agrees, stating the National Wealth Fund (NWF) is part of the Investment Taskforce and will be aware of emerging projects and regulatory requests. The NWF's investment principles include supporting growth and clean energy missions, delivering financial returns, and attracting private capital, which indirectly covers project speed and job quality, though it doesn't specify how these are explicitly weighted.
Scotland Office
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Conclusions (9)
2
Conclusion
Acknowledged
Such an approach is the minimum necessary for a smooth transition of workers, and to avoid the risk of harming UK tax revenues, economic activity, and employment in many Scottish communities, where the effects of the transition will be disproportionately felt. The loss of jobs abroad has detrimental impacts to …
Government Response Summary
The government states its commitment to achieving a fair and inclusive transition, outlining various existing strategies, plans, and investments like the Clean Power Action Plan, Clean Energy Industries Sector Plan, and UK Export Finance support. These initiatives aim to ensure a smooth transition for workers and regional economies.
3
Conclusion
Accepted in Part
We recognise that with time moving to clean energy improves the UK’s overall energy security. However, as fossil fuels are to continue to form part of the UK’s energy mix for decades to come, there are compelling arguments to meet as much of that need as possible from domestic sources. …
Government Response Summary
The government acknowledges the natural decline of the North Sea basin and rejects issuing new exploration licenses. However, it commits to managing existing fields for their lifespan and introducing new Transitional Energy Certificates to help ease the production decline and ensure economic viability.
6
Conclusion
Acknowledged
We welcome the Government’s acknowledgement that it now needs to take action on the oil and gas industry’s fiscal environment. However, a lack of clarity on the fiscal regime beyond 2030 has created uncertainty for industry in the North Sea. The Energy Profits Levy at its current rate of 38%, …
Government Response Summary
The government acknowledges the committee's concerns about fiscal uncertainty, outlining its plan to end the Energy Profits Levy by March 2030 or earlier via a price floor, and to replace it with a new Oil and Gas Price Mechanism for long-term stability.
8
Conclusion
Accepted
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 …
Government Response Summary
The government explains that each project is considered on its merits, with the Secretary of State balancing environmental effects against wider national benefits and objectives. It asserts that the existing EIA process already provides transparency through public notice and published decision reasons, without committing to new transparency measures.
10
Conclusion
Not Addressed
Given what is at stake if transition is mismanaged, we are disappointed that Unite the Union has been unable to share, as promised, its plan to create 35,000 energy transition jobs. The plan might have been a valuable and timely contribution to our inquiry and could have assisted us in …
Government Response Summary
The government outlines its own Clean Energy Jobs Plan and North Sea Future Plan, which aim to increase clean energy jobs and provide a fair transition for the oil and gas workforce, including engagement with trade unions. It does not address the committee's disappointment regarding Unite the Union's failure to provide a promised plan.
11
Conclusion
Accepted
A coherent transition plan for the North Sea is urgently needed. While we recognise that the Government has been in power for 15 months, plans are not yet in place and the transition is already well underway. The Government’s consultation, Building the North Sea’s Energy Future, which commits to producing …
Government Response Summary
The government acknowledges the urgent need for a coherent transition plan and confirms the publication of its 'North Sea Future Plan' in November, further committing to establish a minister-led delivery board in early 2026 to oversee progress.
13
Conclusion
Acknowledged
It is vital that the skills of workers who have made Scotland’s oil and gas industry successful are not lost. We welcome the efforts of both governments to support the development of clean energy jobs and the transfer of skills from the oil and gas sector to other industries. In …
Government Response Summary
The government acknowledges the importance of the Oil and Gas Transition Training Fund, announcing its extension and expansion with up to £18 million in joint UK and Scottish government funding from 2026-29. They also detail the new North Sea Jobs Service to provide comprehensive career transition support.
17
Conclusion
Accepted
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 …
Government Response Summary
The government agreed with the committee's conclusions regarding past failures at Grangemouth and detailed its subsequent actions, including a £100 million support package, a training guarantee, the Project Willow feasibility study, and a £14.5 million seed fund to transform the site.
19
Conclusion
Accepted
Continued momentum on the future of Grangemouth is vital. Project Willow must not be left to gather dust while jobs are at stake. We welcome the Scottish Government’s £25 million Just Transition Fund and the UK Government’s commitment of £200 million in ringfenced National Wealth Fund funding to leverage private …
Government Response Summary
The government agrees on maintaining momentum for Grangemouth, announcing £14.5 million in funding and describing the due diligence process undertaken by investment agencies. They commit to understanding and providing necessary policy or regulatory support as projects emerge to unlock investment.