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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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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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 (1)
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.