The future of Scotland's oil and gas industry

Summary

1. The UK oil and gas industry is an important part of both the UK’s and Scotland’s economies and has contributed to the UK’s energy security for decades. The North Sea has been a vital asset for the UK since oil and gas extraction began over 50 years ago, generating economic benefits, providing skilled jobs, and consistently playing a role in meeting energy demand.

2. However, with the North Sea basin now geologically mature and the UK’s clean energy transition ramping up, the industry is at a critical junction. It is widely acknowledged that UK oil and gas fields are reaching the end of their lifespans and domestic production will follow a trend of continued decline. As production declines, historic trends show a sharp decrease in oil and gas jobs, with communities such as those in Aberdeen and Aberdeenshire affected the most.

3. We have produced this interim report on the future of Scotland’s oil and gas industry as part of our broader inquiry into Scotland’s role in the UK’s net zero transition. During our inquiry, we heard significant ambition for the North Sea to drive the energy transition towards renewable and clean energy technologies, and for existing oil and gas workers to transition into clean energy sectors.

4. However, we also heard the case for easing the gradient of the oil and gas industry’s decline. We are concerned that the scale-up of clean energy projects is taking longer than expected and is progressing slower than the decline of the oil and gas industry. We found that clean energy jobs are not being created at the pace or the scale required to match the job losses arising from the decline of the North Sea oil and gas industry. In this report we call on the Government to set out how it intends to address this issue and urge it to take a pragmatic approach to its North Sea licensing policy.

5. We examined the tax and regulatory changes the industry is undergoing, and how that environment has impacted the pace and character of transition. We conclude that the UK will require oil and gas in its energy mix for decades to come and the fiscal and regulatory regimes should reflect that. As part of this, we are concerned that without reform, the current tax regime will accelerate the decline of the North Sea oil and gas industry and its supply chain.

6. In light of recent regulatory changes, we recommend that the Government issues explanatory statements after it assesses oil and gas developers’ revised environmental impact assessments for new fields, Rosebank and Jackdaw. A justification is vital to ensure the industry and public can be confident in the Government’s stewardship of the North Sea.

7. We also examined the Grangemouth oil refinery closure and its significance as a case study of governments’ management of Scotland’s energy transition at large. We conclude that the UK and Scottish governments should have acted sooner to prepare for the resulting job losses and set in motion plans for future industries at the site at a much earlier point. In response to our report, we call on the Government to outline what it has learned from the Grangemouth case, and what can be done to ensure comparable transitions will be better managed. We also emphasise the importance of continued momentum within Government on Grangemouth’s future.

8. Finally, we ask that the Government defines the conditions and actions that would constitute a ‘just transition’ for workers and communities, to act as a guide for transitioning industries in future.

Introduction

9. The UK oil and gas industry is an important element of both the UK’s and Scotland’s economies and has contributed significantly to the UK’s energy needs and energy security. The industry added £25 billion to the UK economy in 2023, with Scotland’s industry accounting for £14 billion—56% of the total.¹ The industry supports an estimated 115,000–120,000 direct and indirect jobs across the UK,² of which 66,000 are based in Scotland, primarily concentrated in the northeast.³ Since the 1970s, domestically produced oil and gas—the vast majority of it extracted from the North Sea—has consistently played a role in meeting UK energy demand⁴ and contributed greatly to UK Treasury receipts.⁵

10. With the North Sea basin now geologically mature and the UK’s clean energy transition ramping up, the UK oil and gas industry is undergoing a period of significant change. Historic trends show a sharp decrease in UK oil and gas jobs. Combining data from Offshore Energies UK (formerly Oil and Gas UK) and Robert Gordon University’s Energy Transition Institute suggests the workforce, in terms of direct and indirect jobs, declined by approximately 75,000 from 190,700 in 2016 to 115,000 in 2024.⁶ Between 2023 and 2024 alone, it is estimated the UK oil and gas workforce declined by around 5,000 jobs (4.2%).⁷

11. One of the UK Government’s five Missions this Parliament, as set out in its Plan for Change, is to make Britain a “clean energy superpower”.⁸ This includes an ambition to achieve at least 95% of low carbon electricity generation by 2030, and to meet the legally binding target of net zero greenhouse gas emissions by 2050.⁹ At the most recent global climate conference, COP29 in November 2024, the Prime Minister committed to an 81% emissions reduction in the UK by 2035.¹⁰

12. In line with this Mission, the Government launched a consultation in March 2025 to gather views on how it will work with the sector to manage existing oil and gas fields for the entirety of their lifespans, as well as how to enact the Government’s commitment not to issue new licences to explore new fields in the North Sea.¹¹ The Government intends to produce a plan for the North Sea based on responses to the consultation.¹² The Government’s response to the consultation is due to be published by the end of 2025.¹³

Our inquiry

13. We launched our inquiry into Great British Energy and the net zero transition in November 2024, with the aim of exploring Scotland’s role in the UK’s energy transition away from fossil fuels. We received 50 items of written evidence and have held six oral evidence sessions so far, with representatives from industry, academia, sector bodies, trade unions and the UK Government. We have also undertaken four visits in connection with this inquiry to meet with stakeholders in Aberdeenshire, Norway, Shetland and Loch Sloy.¹⁴ We would like to thank all those who have contributed to our inquiry so far.

14. This interim report presents our findings from the first phase of our inquiry, which focused on the future of Scotland’s oil and gas sector, including the closure of the Grangemouth oil refinery. Although separate, and conducted six years apart, our work complements a previous inquiry conducted by our predecessor Committee in 2018–19 on the future of the oil and gas industry.¹⁵ The second phase of our inquiry will focus on the energy transition beyond oil and gas and, in particular, the role of Great British Energy.

Our report

15. With the North Sea transition well underway, and the Government’s consultation still under review, we have chosen to publish this interim report now. Having weighed the evidence, we have made eight actionable recommendations to the UK Government which, if agreed to, we believe would ensure that the UK’s transition away from fossil fuels is one that puts people and communities first. The first chapter sets out the context of North Sea transition and the Government’s approach. The second chapter looks at the case for easing the rate of North Sea decline. The third chapter discusses the tax and regulatory context of transition. The fourth chapter considers how to manage the impacts of transition; and the final chapter focuses on the closure of the Grangemouth oil refinery, and what it means for energy transition.

1 North Sea transition

16. This chapter outlines the meaning of North Sea transition and the Government’s policy response, providing the context for our conclusions and recommendations in chapters two to five.

Declining North Sea production

17. The North Sea basin has been used to extract oil and gas for approximately 50 years.¹⁶ However, it is widely acknowledged, including by North Sea operators, that oil and gas fields on the UK continental shelf are reaching the end of their lifespans, due to the basin’s maturity.¹⁷ Production peaked at the beginning of the 21st century and has been broadly in decline since.¹⁸ In 2024 oil and gas production reached record 21st century lows, 75% below the 1999 peak.¹⁹ The industry regulator, the North Sea Transition Authority, projects oil and gas production will decline annually between 2025 and 2030 by approximately 7% and 11% respectively.²⁰ Longer-term projections anticipate an 89% fall in North Sea production by 2050 compared with 2024 (see Figure 1).²¹

Meeting UK energy demand

18. Until the mid-2000s, the UK was largely self-sufficient in domestically produced oil and gas but has been a net importer for the majority of the time since.²² With North Sea production in continued decline, it is expected that the UK will continue to be a net importer of oil and gas until 2050.²³ Although the North Sea is a mature basin, in 2024 it was still producing roughly 50% of the UK’s natural gas demand and roughly 60% of the UK’s primary oil demand.²⁴ Analysis by Offshore Energies UK suggests that if managed correctly, and with a constructive regulatory and fiscal environment, half of the 13–15 billion barrels of oil and gas the UK is projected to need by 2050 could still be produced from domestic North Sea reserves.²⁵

19. However, it is important to note that these figures do not provide the full picture. Due to the highly interconnected global energy system, not all North Sea produced oil and gas is used domestically and not all oil and gas consumed in the UK is domestically produced. For instance, most UK produced gas is used domestically and any excess is typically exported in summer months when demand is low;²⁶ and, due to the type of crude oil extracted in the North Sea, the majority of domestically produced oil is exported and refined elsewhere.²⁷

20. According to the UK’s independent adviser on climate change, the Climate Change Committee, demand for fossil fuels in the UK is expected to decline over time.²⁸ The Climate Change Committee projects falls in primary UK oil and gas demand of around 80% by 2050, driven mostly by the expansion of low-carbon electricity generation, electrification and the subsequent energy efficiencies (e.g. in heating and transport), and fuel switching.²⁹ In the Climate Change Committee’s most recent analysis, it expects UK net imports of fossil fuels to fall by 77% between 2025 and 2050, as a result of declining demand.³⁰

Figure 1: UK oil and gas production and demand (actual and projected)

Source: North Sea Transition Authority, Production and expenditure projections, March 2025. (accessed 21 July 2025). Graph uses NSTA production figures (crude oil & natural gas liquids and gross gas) and NSTA demand figures (oil demand inc. marine bunkers and net gas demand not met by biogas) derived from the Climate Change Committee’s Seventh Carbon Budget.

UK Government’s approach

21. The Government’s Clean Energy Superpower Mission, achieving 95% clean power by 2030 and net zero by 2050, will require both a significant reduction in fossil fuel dependency and the rapid deployment of new clean energy capacity and capability in the UK.

22. The Government argues that clean energy is the only way to deliver energy security, good jobs for the long-term, and climate security for future generations.³¹ A key part of the Government’s argument is that by moving the UK to a more decarbonised economy, consumers will be protected from volatile fossil fuel prices.³² The Parliamentary Under-Secretary of State for Energy, Michael Shanks MP, told us that the global price of gas, whether it comes from the North Sea or elsewhere, is the main cause of high energy bills for consumers.³³ Other factors contributing to consumer energy costs include policy costs added to bills to fund environmental and social schemes, network costs, and the marginal pricing model, through which energy retailers source energy supplies.

Proposed ban on new exploration licences

23. As part of its Clean Energy Superpower Mission, the Government made the manifesto commitment not to issue new licences to explore new oil and gas fields.³⁴ The Government consulted on this position as part of its consultation, Building the North Sea’s Energy Future, which ran from 5 March to 30 April 2025, but has not yet published its response.³⁵ Michael Shanks told us the Government is committed to delivering its manifesto commitment, but hinted at ways the outcome of the consultation may take a pragmatic approach. He told us there are cases where oil and gas developments in the North Sea could take place without requiring a new exploration licence:

The exploration of new fields will not happen, but there are, of course, complexities in how licences are currently operating near fieldwork that for all intents and purposes, you would perhaps consider to be related to a field that is already extracting. There are a series of options there.³⁶

When we pressed the Minister on this position, he emphasised that he did not want to pre-empt the Government’s consultation response and was therefore unable to clarify what such options would involve in practice.³⁷

Oil and gas production to continue for decades to come

24. Despite this clear ambition to move away from fossil fuels, the Government maintains that oil and gas production in the North Sea will “continue for decades to come”.³⁸ The Government appears to give three main reasons for this. Firstly, the Government expects that demand for oil and gas will remain for some time in harder-to-transition sectors as the UK approaches net zero.³⁹ This is in alignment with the Climate Change Committee’s pathway to 2050, which finds that demand for fossil fuels will remain in sectors such as aviation and some heavy industry, which may find it hard to electrify.⁴⁰

25. Secondly, the Government expects gas to continue to play an important role in ensuring security of supply during the clean power transition.⁴¹ The Government’s Clean Power Action Plan predicts a fundamental shift in the role and frequency of gas generation, moving from using gas in power generation every day, to an important back-up to be used only when essential.⁴² The Plan acknowledges that there will be periods of the year where weather conditions and higher electricity demand will mean intermittent renewable energy sources might not be able to meet demand.⁴³ Similarly, the Climate Change Committee’s pathway to net zero retains a reserve of gas for electricity generation into at least the 2040s.⁴⁴

26. Thirdly, the Government has defended its decision to continue oil and gas production for decades on the basis that it wants to “carefully” manage the rate of decline in the North Sea, ensuring a smooth transition of existing workers into decent jobs in future industries.⁴⁵ The Government told us it wants to ensure a fair, orderly and prosperous transition toward clean energy, ensuring energy security, lower bills and good, long-term jobs.⁴⁶

2 Why does the North Sea transition matter?

27. While it is broadly accepted that North Sea production is in long term decline, our inquiry has heard the case for easing the gradient of the industry’s decline. This chapter will discuss the following factors in turn: the impact of North Sea transition on jobs and communities, the tax revenue and economic benefits of domestic industry, the environmental impact of imported fossil fuels, and the energy security implications of North Sea transition.

Impact of transition on jobs and communities

28. Our primary concern is the potential job losses as the oil and gas industry declines, and the knock-on effects this will have on communities where jobs are concentrated.⁴⁷ There are thought to be 115,000–120,000 direct and indirect jobs within the UK oil and gas industry,⁴⁸ of which roughly 66,000 are in Scotland.⁴⁹

29. During our inquiry, we heard that Scotland is at the forefront of the UK offshore energy workforce’s transition from oil and gas to clean energy and low-carbon technologies, such as offshore wind and carbon capture.⁵⁰ We heard that nearly one in 30 of Scotland’s working population is employed in or supports the offshore energy industry, compared to a UK-wide figure of about one in 220. The concentration is even higher in Scotland’s northeast, where one in six workers are employed in or support the offshore energy industry.⁵¹ If that figure includes jobs created by workers spending their money in the local economy, known as induced jobs, it rises to nearly one in four.⁵²

Figure 2: Workforce supporting the UK offshore energy sector

Source: Robert Gordon University Energy Transition Institute, Striking the balance, June 2025, p.21

Box 1: What are direct, indirect and induced jobs?

When describing the number of jobs in the industry, one of three definitions is typically used:

1. Direct jobs—employment in companies that provide specialist goods and services with a focus on oil and gas projects.

2. Indirect jobs—wider supply chain jobs supported by oil and gas activity. For example, logistics, construction and catering.

3. Induced jobs—employment created by the additional personal spending of both direct and indirect workers. For example, spending in restaurants, cafés and shops.⁵³

30. Several witnesses told us of their concern that the decline of the UK oil and gas industry could result in a damaging rate of job losses and cause harm to communities.⁵⁴ We heard calls for governments to deliver a ‘just transition’ that protects livelihoods and supports people through the transition to clean energy.⁵⁵ Trade unions suggested that to dismantle the UK’s domestic industry too quickly without the skills support and jobs in place would have devastating impacts on people and local economies.⁵⁶ Broadly speaking, throughout our inquiry, we heard that the Government’s ability to deliver a smooth and managed transition hinged on two main factors:

a. the pace at which the UK oil and gas industry declines; and

b. the pace at which the UK clean energy industry grows.⁵⁷

North Sea decline outstripping clean energy jobs

31. We heard that the scale-up of clean energy projects is taking longer than expected and progressing slower than the decline of the oil and gas sector in the UK, which inevitably has a knock-on effect on jobs.⁵⁸ The Government has said that most clean energy jobs will need to be filled by the existing workforce, with skilled workers in carbon intensive sectors playing an important role in meeting that demand.⁵⁹ This matches repeated claims that the existing oil and gas workforce should be able to transition to new energy sectors as many skills are highly transferable, with some estimating that 90% of skills are transferable.⁶⁰ However, the creation of clean energy jobs is not exclusively in the Government’s power. Existing jobs are within private companies, many of which operate internationally and therefore take commercial decisions as to where to allocate investment and resources.

32. Combining data from Offshore Energies UK and the Energy Transition Institute suggests the UK oil and gas workforce has declined by approximately 75,000 jobs from 190,700 in 2016 to 115,000 in 2024.⁶¹ Between 2023 and 2024 alone, it is estimated the workforce declined by around 5,000 jobs (4.2%).⁶² Offshore Energies UK suggests almost 1,000 direct and indirect jobs are set to be lost every month between now and 2030.⁶³

33. Under the right policy conditions, the Energy Transition Institute believes that greater renewable energy capacity could offset oil and gas job losses, and that the offshore renewables workforce could exceed the oil and gas workforce from the late 2020s onwards. However, this growth would require new recruitment alongside the retraining and deployment of workers.⁶⁴ The same study found that under-investment could result in the oil and gas workforce dropping from 115,000 to 57,000 by the early 2030s, a reduction of around 400 jobs every two weeks.⁶⁵ The report also said that the UK needs to manufacture more of its wind turbines and associated infrastructure, instead of importing components from overseas. The report recommends that the Government establishes “long-term agreements with local manufacturers to stabilise demand”. It also recommends that the Government “incentivises domestic production through policy support, tax incentives, and targeted interventions”.⁶⁶

34. We heard a significant degree of optimism about the potential to grow clean energy jobs in Scotland.⁶⁷ Scottish Renewables and University of Aberdeen’s Professor John Underhill and Professor Alexander Kemp told us the renewables sector in Scotland has shown impressive growth in recent years.⁶⁸ Looking ahead, the Scottish Government said low-carbon jobs in Scotland could rise from 19,000 in 2019 to 77,000 by 2050. It also said that 90% of renewable energy supply chain companies expanded their workforce in 2023–24 because of new opportunities in renewable energy.⁶⁹ Research centre ORE Catapult forecast a 2050 scenario, with offshore wind at the core of the UK energy mix, where employment in offshore wind could total 160,000; carbon capture could support up to 28,000 jobs; and blue and green hydrogen could potentially employ 35,000 people.⁷⁰

35. Several submissions highlighted the potential for oil and gas workers to transition into the offshore wind sector because of the transferability of skills.⁷¹ The Clean Power Action Plan expects offshore wind, which the Government described as the “backbone of the clean power system”,⁷² to represent 48%-53% of Britain’s electricity supply by 2030.⁷³ Scottish Renewables told us that the UK offshore wind workforce is expected to increase from 34,000 in 2023 up to 138,000 in 2030, but crucially this depends on the extent to which the UK follows through with its ambitions for offshore wind development.⁷⁴ Carbon capture and storage, hydrogen and oil and gas decommissioning were other sectors identified as having a high degree of skills transferability.⁷⁵

36. While we heard optimism about Scotland’s potential, we also heard that the growth of renewables has not yet generated jobs in sufficient quantities to offset both the ongoing and expected losses in oil and gas.⁷⁶ Michael Shanks pointed to the current Government’s ambition to create jobs through “catalytic” public investment tools such as Great British Energy and the National Wealth Fund. However, he acknowledged that the job creation impact is not yet demonstrable.⁷⁷ He said:

There is some significant investment coming through, and the jobs will follow. I am not going to sit here and say that, in a year, we have turned all of this around. Of course we have not, but we have laid the foundations, and tens of thousands of jobs will come from some of those decisions.⁷⁸

37. Multiple submissions called on the Government to accelerate investment into renewable and low-carbon technologies to ensure there are opportunities for transitioning workers at the pace and scale required.⁷⁹ Paul de Leeuw, Director at the Energy Transition Institute, suggested the so-called ‘Goldilocks zone’—where the decline in oil and gas jobs coincides with the expansion of clean energy jobs—is between now and the early 2030s.⁸⁰ However, both oil and gas and decarbonisation businesses told us that aligning this timing is proving to be a huge challenge.⁸¹ Gavin Templeton, Chief Executive at Veri Energy—a company transitioning Shetland’s Sullom Voe oil terminal into a decarbonisation hub—told us the relocation of oil and gas workers abroad is already happening because of the pressure on the oil and gas industry.⁸² He told us:

I am really worried that a just transition will happen, but it will happen somewhere else; it will not happen here because we will have lost all those jobs and that experience.⁸³

We heard a strong sense of urgency about the need for government action. For instance, witnesses representing industry bodies⁸⁴ all cautioned that if a gap is allowed to widen between jobs currently available in oil and gas and those available in renewables, there may be no viable domestic industry or supply chain left to transition.⁸⁵ We heard that without commensurate jobs becoming available, workers will continue to leave the energy sector altogether or move to other countries where they see a future in the oil and gas industry, and that this is already happening.⁸⁶

Tax revenue and economic benefits

38. During our inquiry, we also heard the tax revenue and economic argument for easing the decline of the domestic oil and gas industry. Both industry representatives and academics made the case for prioritising continued domestic production over imported alternatives because of the benefits to tax revenues and UK GDP.⁸⁷ Notably, Michael Shanks acknowledged that the tax revenues generated from oil and gas extraction “obviously contribute significantly to the Treasury”.⁸⁸

39. The tax regime for the oil and gas industry involves three main taxes plus the Energy Profits Levy (EPL), which was intended to be temporary and is controversial. We heard from some industry representatives that the UK has no equivalent tax on the oil and gas it imports, highlighting that domestic production results in material benefits to the UK economy in a way that imported alternatives do not.⁸⁹ We will turn to the impact of the EPL on North Sea transition in greater detail in the following chapter.

40. However, after peaking in 2022–23, total UK oil and gas revenues have been in decline. Total tax revenues from UK oil and gas production amounted to £4.5 billion in the financial year 2024–25. This is a 27% reduction on the year before, due to lower oil and gas production and lower energy prices. Tax receipts from the EPL fell to £2.9 billion, down 20% over the same period.⁹⁰ The Office for Budget Responsibility (OBR) forecasts that oil and gas tax revenue will decline to £2.3 billion (0.1% of GDP) in 2029–30 and points to the continued fall in oil and gas production as the primary reason behind the decline.⁹¹

41. In addition to tax revenue, we heard that domestic industry makes a significant contribution to the economy more broadly. In 2023 the industry contributed around £25 billion in UK Gross Value Added (GVA), approximately 1% of total UK GVA.⁹² It is estimated Scotland accounted for £14 billion of this contribution.⁹³ In addition to this, data analyst Experian estimates that every £1 million of investment by the oil and gas industry generated a further £2.1 million of GVA in 2022.⁹⁴ According to Offshore Energies UK’s estimations, if the ban on issuing exploration licences was lifted, additional North Sea production could add £165 billion to the UK economy.⁹⁵

Environmental impact of imported fossil fuels

42. The environmental impact of some imported fossil fuels compared with domestic production is another key consideration in the debate on the role of the domestic oil and gas industry in the UK’s energy transition and the pace of its decline.

43. Some evidence to our inquiry suggested that domestically produced gas results in lower emissions than some imported alternatives.⁹⁶ Currently, most of the UK’s gas imports are pumped in through pipelines from Norway,⁹⁷ which is on average cleaner than UK production.⁹⁸ However, we heard this is not the case for imported liquefied natural gas (LNG). Hebe Trotter, Vice President of Global Government Relations at Harbour Energy, and the Aberdeen & Grampian Chamber of Commerce both cited North Sea Transition Authority analysis that finds LNG has an average emissions intensity that is nearly four times higher than domestically produced gas.⁹⁹ This is a significant factor considering the UK’s legally binding emissions targets are set on the basis of territorial emissions.¹⁰⁰ In other words, emissions associated with imported fossil fuels do not count towards the UK’s net zero emissions by 2050 target.

44. Imported LNG’s higher emissions intensity is due to the processing methods and long-distance shipping.¹⁰¹ LNG, transported internationally by large shipping tankers, has become a popular method of transporting natural gas in recent decades¹⁰² and this mode of trade is expected to grow by nearly 50% from 2024 levels by 2030.¹⁰³ The UK has imported LNG commercially since 2005, with imports increasing rapidly from 2008 before peaking at 45% of UK gas imports in 2022, following Russia’s invasion of Ukraine.¹⁰⁴ Since then, LNG imports have fluctuated, with LNG accounting for 25% of imports in 2024.¹⁰⁵

45. Although the Government accepts there are “emissions associated” with LNG,¹⁰⁶ it told us it is difficult to make a connection between domestic production and lower emissions on a global scale.¹⁰⁷ In oral evidence to us, Michael Brannan, Co-Deputy Director of Offshore Energy Transition and Coal Legacy at the Department for Energy Security and Net Zero, referred to advice contained in a 2022 letter from the Climate Change Committee to the then-Business Secretary on the climate compatibility of oil and gas licensing in the North Sea. While the letter says the Climate Change Committee is unable to determine the net effect of domestic production versus imported LNG on global emissions, it acknowledges there may be emissions advantages to UK production replacing imports. The letter also highlights the economic advantages of North Sea extraction and states that reduced energy imports could improve UK energy security. The Climate Change Committee concludes that weighing up the advantages of domestic production over imported alternatives is an inherently political decision and it does not land on one side or the other.¹⁰⁸

Energy security

46. Energy security is another key consideration in the debate on the role of continued domestic oil and gas production and the pace of transition to clean energy. Several witnesses told us that an over-reliance on imported fossil fuels puts the UK’s energy security at risk.¹⁰⁹ Energy security is commonly defined as the uninterrupted availability of energy sources at an affordable price.¹¹⁰ Oil and gas prices in the UK are set internationally, which means price shocks caused by global events affect the UK price. Therefore, while domestic production could improve the availability of supply, the use of domestically produced oil and gas in the UK would not necessarily mean cheaper prices, because it is just as vulnerable to price shocks as imported fossil fuels.¹¹¹

47. Both the Government and Climate Change Committee say that the best way to reduce the UK’s exposure to volatile oil and gas prices is to reduce the proportion of fossil fuels in the energy mix.¹¹² The Climate Change Committee says that maintaining UK production makes little difference to UK energy security or to energy prices.¹¹³ It told us that the increased presence of renewables in the system reduces the UK’s reliance on gas, which in turn helps keep down consumer bills.¹¹⁴ Similarly, the Government’s position is that “homegrown” clean power will guarantee energy security, and that new licences to explore new fields will only make a “marginal difference” to future production.¹¹⁵ The Government’s view is:

As long as consumers remain exposed to international energy markets through dependency on oil and gas for energy, they will be vulnerable to shocks impacting costs which drove the cost-of-living crisis. By contrast, exploiting the vast clean energy opportunities available to Great Britain has the potential to deliver the secure, homegrown clean energy British consumers need.¹¹⁶

48. However, industry takes a different view. For instance, we heard that continued domestic production of oil and gas ensures security of supply, a core tenet of energy security.¹¹⁷ Offshore Energies UK argued that if fossil fuels will continue to be part of the energy mix for decades to come, which the Climate Change Committee agrees will be the case,¹¹⁸ then it is more secure for this supply to come from the North Sea than for the UK to rely on imports from abroad.¹¹⁹

49. To highlight the importance of domestic production for energy security, the Aberdeen & Grampian Chamber of Commerce drew parallels with New Zealand’s own ban on exploration licences introduced in 2018. Six years later the New Zealand Government reversed its policy, citing constrained gas supply, energy security concerns and impacts on investment, economic growth and prosperity.¹²⁰ It is also noteworthy that International Energy Agency (IEA) Director, Fatih Birol, recently said there is a need for investment in oil and gas fields to support global energy security, because fossil fuels remain an important part of meeting global energy demand, marking a shift from the IEA’s former presumption against new oil and gas fields.¹²¹

50. A recent publication by the North Sea Transition Authority indicated that North Sea production forecasts have been cut by almost 1 billion barrels of oil equivalent by 2050, the shortfall having to be replaced with imports. The downgrade in output was calculated by comparing the production projections published in 2023 with the latest version, published in autumn 2025. In 2023 the North Sea Transition Authority projected UK oil and gas production equivalent to 681 million tonnes of oil between 2025 and 2050. In the latest equivalent data, the total has been revised down to 557 million tonnes. The 124 million tonne downgrade equates to a billion barrels of oil.¹²² Offshore Energies UK said that this reduction will make the UK even more reliant on imports than previously estimated.¹²³

51. We have also heard that the UK’s existing North Sea supply chain can play a significant role in the transition to clean energy sectors, and therefore the path to greater overall energy security. Industry bodies told us that the existing skills, infrastructure and workforce, predominantly in the North Sea, will be necessary to meet the Government’s clean energy targets.¹²⁴ Paul de Leeuw from the Energy Transition Institute suggested 80% of the existing UK oil and gas supply chain can help to accelerate the renewable sector.¹²⁵ However, there are concerns about losing supply chain jobs to competitive overseas markets.¹²⁶ Offshore Energies UK warned that accelerating the basin’s decline will create a “domino effect” across the North Sea supply chain and the overseas flight of these businesses.¹²⁷ Neil Gordon, Chief Executive at Global Underwater Hub, warned that if the oil and gas industry declines too quickly, the UK will lose its supply chain capacity and capability.¹²⁸ Similarly, Decom Mission told us that Government policy decisions to phase-down oil and gas and scale-up clean energy have moved ahead of the reality of supply chain capacity.¹²⁹

3 Tax and regulatory environment

57. Throughout our inquiry, we heard how the North Sea oil and gas industry is currently undergoing a period of fiscal and regulatory change. This chapter will consider how recent and expected changes to the North Sea’s tax and regulatory environment impact the pace and character of transition.

Tax environment

58. Some evidence to this inquiry suggested that the UK tax environment has accelerated the decline of the oil and gas industry in Scotland beyond its expected rate by creating a discouraging investment environment. Arguments supporting this focus in particular on the effects of the Energy Profits Levy (EPL).¹³⁰

Box 2: What is the Energy Profits Levy?

• Also known as the windfall tax, the EPL is a temporary tax on oil and gas companies which operate in the UK. The EPL was introduced in May 2022 to tax the large profits made due to the surge in prices at the time prompted by the Russian invasion of Ukraine. Initially set at 25%, the levy was increased to 35%, and then to 38% from November 2024 and extended to 2030 under the current Government. This brought the total headline rate of tax on upstream oil and gas activities to 78%.¹³¹
• The measure also reformed two industry investment allowances (i.e. tax breaks). It removed the ‘Investment Allowance’ and reduced the rate of the ‘Decarbonisation Investment Allowance’, so that the cash value would remain the same after the EPL increase.¹³²
• In the 2024 Autumn Budget the Government committed to permanently end the EPL in 2030, or even earlier if energy prices fall back to historically normal levels. Since then, the Government has committed to introduce a new mechanism to replace the EPL, intended to respond to future oil and gas price shocks. The Treasury and HM Revenue & Customs (HMRC) consultation on a new mechanism closed on 28 May and has yet to publish an outcome.¹³³

59. We heard evidence, particularly from industry representatives, that the levy is no longer proportionate, and contributes to a discouraging and uncompetitive investment environment, ultimately putting jobs, investment and future production at risk.¹³⁴ For instance, Louise Kingham, Senior Vice President for Europe & Head of UK at BP, and Russell Borthwick, Chief Executive at the Aberdeen & Grampian Chamber of Commerce, told us the levy is no longer proportionate because no windfall profits are being made.¹³⁵ According to the North Sea Transition Taskforce,¹³⁶ an independent policy group, of the 15 EU member states that introduced EPL-equivalent taxes after the 2021–22 price spike, all but three have reversed them.¹³⁷ Louise Kingham from BP told us: “we are not living in a windfall world anymore; that has long gone”.¹³⁸

60. Following the dramatic rise in oil and particularly gas prices in late 2021 and 2022, figures by the OBR show the consequent spike in oil and gas revenues during this time. Alongside the introduction of the EPL, tax receipts peaked at £9.9 billion in 2022–23 (0.38% of GDP), up from £2.59 billion (0.11% of GDP) the previous year.¹³⁹ However, the OBR’s analysis for 2023–24 showed a sharp downward decline in receipts due to lower oil and gas prices and declining production. The OBR’s March 2025 forecast predicts tax receipts to fall to £4.21 billion and continue to decline to £2.3 billion (0.1% of GDP) by 2029–30.¹⁴⁰

Figure 3: UK oil and gas revenue trends and latest forecasts

Source: Office for Budget Responsibility, Oil and gas revenues, (accessed 11 September 2025)

61. Meanwhile, the Scottish Government told us that, while it supported the original rate and duration of the EPL, it does not support the Government’s latest extension and increase, citing the negative impact on jobs and investment in the transition.¹⁴¹ The Scottish Government Cabinet Secretary for Climate Action and Energy, Gillian Martin MSP, was reported as saying the UK Government needed to “think seriously about bringing an end to the EPL” because the policy is “shaking business confidence”.¹⁴² Industry similarly argues that the lack of certainty on the levy’s future has had material consequences for North Sea jobs and investment.¹⁴³

62. As an instance of this, Ms Kingham told us that BP’s investment in its North Sea business had slowed considerably because of the lack of clarity on the fiscal environment, compounded by uncertain regulatory frameworks—an issue the following section of this report will discuss.¹⁴⁴ Both Ms Kingham from BP and Ms Trotter from Harbour Energy told us that, as international companies, they have to compete for capital from within their own businesses, and that there are plenty of other countries that have a more favourable fiscal environment.¹⁴⁵ Ms Trotter warned that the lack of clarity on the fiscal environment post-2030 would have damaging impacts on jobs and its ability to invest in its North Sea business.¹⁴⁶ Three months after these comments, in May 2025, Harbour Energy announced 250 redundancies, approximately 25% of its onshore workforce, following a further 350 job cuts that took place in 2023. The company said both redundancy rounds were a direct consequence of the EPL.¹⁴⁷ Similarly, North Sea operator Hartshead Resources cited uncertainty over UK taxes as the reason behind job cuts on a North Sea gas project and its delay in awarding contracts in 2024.¹⁴⁸

63. Both representatives from BP and Harbour Energy called for a more stable and predictable mechanism to allow for further investment in the UK.¹⁴⁹ Ms Kingham from BP said the lack of certainty on the regime from 2030 onwards, indeed whether the consultation would bring the date of changes forward, has stalled its ability to make long-term investment decisions.¹⁵⁰ The North Sea Transition Taskforce has called on the Government to replace the EPL as soon as possible with a regime that is proportionate, adjustable, and predictable in how it responds to changes in the price of oil and gas. It recommended that the Government consultation ends the “over-hanging threat of arbitrary changes” in order to give businesses certainty about their tax obligations and therefore their own long-term investments.¹⁵¹ Likewise, Ms Trotter from Harbour Energy called on the Government to bring in the new mechanism earlier than 2030, because 2030 is “too late” to hold off on investment planning.¹⁵² She said the oil and gas industry could add £200 billion worth of economic value to the UK if the Government gets the fiscal environment “right”.¹⁵³

64. The supply chain trade body, Energy Industries Council, said that while the EPL is a tax on operators, it also has knock-on effects on the North Sea supply chain. It warned how stalled projects and increased costs for operators also cause reduced activity across the whole energy supply chain.¹⁵⁴

65. The Government acknowledged that after a period during which there were several changes to the tax regime, it is important to provide the industry with long-term certainty. Following the Treasury and HMRC consultation, the Government says it aims to implement a new regime that will give investors certainty about how taxes will respond to any future oil and gas shocks.¹⁵⁵

Regulatory environment

68. As well as changes to the tax environment, the UK oil and gas industry is currently undergoing a period of regulatory change. This is in part a result of the change in UK Government, with its anticipated ban on new exploration licences, and in part a response to the Supreme Court ruling on environmental assessments for new oil and gas developments.

69. The Labour Party made the commitment in its 2024 General Election manifesto not to issue any new exploration licences for North Sea oil and gas fields, but to maintain existing fields for the entirety of their lifespan.¹⁵⁶ This position was stress-tested when Scotland’s Court of Session ruled in January 2025 that the production consent for two new oil and gas fields, Rosebank and Jackdaw, were granted unlawfully, and developers would need to seek new approval before production could begin.¹⁵⁷ There are several regulatory approvals required for offshore oil and gas activity. An exploration licence is the first stage. There is then further regulation, including production consent, which involves submitting an environmental impact assessment of the fields.

70. The ruling on Rosebank and Jackdaw followed the landmark ‘Finch’ Supreme Court ruling in June 2024, which found that environmental impact assessments must include the climate impact of the eventual burning of the extracted fossil fuels, also known as end-use or scope 3 emissions.¹⁵⁸ When this ruling was applied retrospectively to Rosebank and Jackdaw, the Government showed support for the fields’ continued development. Both the Prime Minister and Chancellor expressed support by pointing towards the manifesto commitment to honour existing licences.¹⁵⁹ The Chancellor was reported as saying:

We said in our manifesto that they would go ahead, that we would honour existing licences, and we’re committed to doing that, and go ahead they will.¹⁶⁰

71. After consulting industry on the required changes, the Government published refreshed guidance in June 2025.¹⁶¹ In evidence to this inquiry, it was apparent that the anticipated changes to the guidance created uncertainty for the industry.¹⁶² In February representatives from BP and Harbour Energy told us the lack of certainty on the regulatory environment was a barrier to future investment and urged the Government to clarify its position as soon as possible.¹⁶³ Both witnesses emphasised the importance of the industry gaining clarity soon with the transition now at a key junction, and cautioned against uncertain policy directions creating a cliff edge for the sector.¹⁶⁴

72. With the guidance now published, the Rosebank and Jackdaw developers will have to draw up new applications, which the Secretary of State for Energy Security and Net Zero will assess. According to the updated guidance, the Government will now consider the climate effect of end-use emissions when assessing applications, balanced against the Government’s overall energy, economic and environmental objectives.¹⁶⁵ For instance, it will take into account companies’ plans to lessen their carbon impact, such as carbon removal projects. While the guidance does not specify what form any carbon mitigation measures should take, it says they must be “high integrity”.¹⁶⁶

73. Rosebank and Jackdaw developers, Equinor and Shell, have said they were reviewing the guidance and committed to advancing their respective projects.¹⁶⁷ Meanwhile, environmental groups Greenpeace and Uplift said the new guidance should result in both projects being blocked, as the sites are incompatible with the UK’s climate commitments.¹⁶⁸

74. Michael Shanks told us that each application will be decided on a case-by-case basis and said there is no internal scoring system that the Department can share publicly.¹⁶⁹ Michael Brannan, Co-Deputy Director at Offshore Energy Transition and Coal Legacy at the Department for Energy Security and Net Zero, said it is important the Department does not give a sense there is a set metric that developers can look at. Mr Shanks confirmed that it will be a balancing act, a process that is similar to many other consent processes, where there is a need to balance environmental impacts against wider factors.¹⁷⁰

4 Managing the transition

77. Throughout our inquiry, we have heard calls for the Government to take a more strategic approach to managing the North Sea transition and to do so urgently. This chapter discusses the main ways in which this could be done—namely, by a long-term transition plan for the North Sea’s energy future, a dedicated fund for transitioning workers to retrain, and improved communication to existing and potential workers about the transition.

Transition plan

78. The Government is expected to publish a transition plan as an outcome of its recent consultation on the North Sea’s energy future.¹⁷¹ While initially intended to consult on the Government’s licensing position, the consultation’s scope was broadened to also cover matters such as the support needed for oil and gas workers to transition to clean energy sectors.¹⁷² Michael Shanks told us the Government aims to publish its response to the consultation later this year, but did not indicate how soon thereafter the transition plan would follow.¹⁷³ Mr Shanks said he aims for the transition plan to give confidence to stakeholders, particularly to communities that have a higher prevalence of oil and gas workers, that the Government has thought through its next steps. He said it will bring together actions from other pieces of work that the Government has ongoing in this area.¹⁷⁴

79. Several witnesses told us of the need for a cohesive strategy that joins up the Government’s thinking on energy transition.¹⁷⁵ The Government published its Industrial Strategy in June 2025, after we had gathered most of our evidence.¹⁷⁶ Prior to its publication, Emma Pinchbeck, Chief Executive at the Climate Change Committee, told us that there had not been enough thinking about industrial strategy for the last 10 years or so of energy policy.¹⁷⁷ Similarly, the Aberdeen & Grampian Chamber of Commerce had described the Government’s policy on energy as “very piecemeal” and needing to be wrapped up in a cohesive strategy.¹⁷⁸ In addition, Ms Pinchbeck had called on the Government to bring together its work on the industrial strategy with its Clean Energy Mission to ensure that workers can easily move over from oil and gas to new sectors.¹⁷⁹

80. As part of its Industrial Strategy, the Government published a Clean Energy Industries Sector Plan and promised that a clean energy workforce plan—the “first ever” of its kind—would follow shortly.¹⁸⁰ Mr Shanks was not able to tell us when the workforce plan will be published, but confirmed the Government’s newly formed Office for Clean Energy Jobs will lead on it. He said the plan will bring together current opportunities and develop the skills of people who are looking for a job in the energy industry but perhaps do not know how to get started.¹⁸¹

81. In oral evidence to us, Derek Thomson, Scotland Regional Secretary at Unite the Union, expressed his concern that the Government does not currently have a plan to create new jobs in places where there are redundancies, and pointed to Unite’s own plan to create 35,000 clean energy jobs by 2030.¹⁸² As part of its plan, we heard that Unite conducted a full skills analysis matrix that shows where comparable jobs are and what skills are needed. We were told that Unite’s plan aimed to boost the UK’s manufacturing capacity and, if it were adopted, would cost the Government £5.5 billion.¹⁸³

82. Mr Thomson agreed to share the plan with us once he had discussed the matter with the General Secretary immediately after our evidence session with him.¹⁸⁴ However, when we requested a copy of the plan after the session, we received no response. We followed up with three letters requesting sight of the energy transition plan, twice to Mr Thomson and then to Unite’s General Secretary Sharon Graham. No response has so far been received.¹⁸⁵

84. Several witnesses told us of the positive role the Government could play, as part of its transition plan, in effective workforce planning by mapping the skills needed for energy transition.¹⁸⁶ We heard that effective workforce planning gives large companies the certainty required to invest in the skills and training of their workforce, and only then will a sense of security trickle down to smaller supply chain businesses.¹⁸⁷ For example, the energy company, SSE, said it needed more support from the Government to address workforce challenges. They called on the Government to urgently address skills shortages by conducting an analysis of demand levels and skills availability by region, to provide industry with an accurate account of workforce requirements.¹⁸⁸

85. Several witnesses stressed the importance of government engagement with communities and trade unions in the development of any transition plan.¹⁸⁹ As discussed earlier in this report, the effects of transition will be felt disproportionately by communities in Scotland.¹⁹⁰ The Climate Change Committee, in its most recent advice to the Government, also recommended that the Government engage with oil and gas communities, particularly those in Aberdeen and Aberdeenshire, to develop proactive and funded plans to support those affected.¹⁹¹

86. In evidence to this inquiry, we heard there is no formalised way for the Government to engage with communities during the transition process at a UK-wide level.¹⁹² Unlike the Just Transition Commissions in Scotland, Northern Ireland and the Republic of Ireland, there is currently no equivalent process or body at a UK-wide level to independently advise the Government on how to deliver fair outcomes during an industrial transition.¹⁹³ Some submissions also pointed to the current Government’s lack of emphasis on the need for a ‘just transition’ in its messaging.¹⁹⁴ Several witnesses told us of the need to learn from the mistakes of previous industrial transitions where workers felt left behind.¹⁹⁵ The Just Transition Commissioner for Scotland, Richard Hardy, said that transition should be something that people feel is being done with them rather than to them. He explained how the coal-mining closures of the 1980s and 1990s in Yorkshire felt like it was being done to communities and left in its wake a “legacy of hurt”.¹⁹⁶ Robert Deavy, Scotland Senior Organiser at trade union GMB, told us how the deindustrialisation of steel and coal in Scotland underpins sentiment towards the energy transition today:

Generations were lost then because we did not have plans in place for retraining workforces, ensuring that they can transition into new areas. We heard oil and gas then was the way forward when we were closing down the coalmines. Now we are getting told that green energy is the new way forward.¹⁹⁷

87. We also heard calls for a policy approach to transition that is long-term in its scope and could garner cross-party support.¹⁹⁸ For instance, Ian Perth, Negotiations Officer at Prospect, said the trade union’s members need confidence that governments of all colours and across all parties are moving in the same direction, and emphasised that political consensus creates stability.¹⁹⁹ Similarly, Mr Thomson from Unite told us that longer term thinking, beyond a government’s five-year term, is needed.²⁰⁰

88. We also heard that such a transition plan needs to be delivered quickly.²⁰¹ Several witnesses, including Michael Shanks, acknowledged that the oil and gas industry’s transition is already well underway.²⁰² Environmental groups, trade unions, and industry all recognise the urgent need for a plan for the future of the North Sea.²⁰³ The Scottish Government described clarity of outcome from the UK Government’s consultation as being of “vital importance” for business and industry.²⁰⁴ Uplift told us that the closure of the Grangemouth oil refinery provides a warning of the urgent importance of a North Sea plan and early government intervention—a point we will return to in the next chapter.²⁰⁵ Similarly, the Trades Union Congress said a transition plan is most effective if in place long before expected job losses in the oil and gas sector take place.²⁰⁶ Offshore Energies UK told us that the Government’s plan needs to acknowledge the reality of the timescales required to deliver its decarbonisation targets because new energy activity will only maintain the current workforce if there are jobs for workers to transition into.²⁰⁷ Similarly, Just Transition Commissioner Richard Hardy said:

There is no point in skilling up and transitioning workers if there are no jobs for them.²⁰⁸

Transition support

91. Another key aspect of the Government’s management of North Sea transition relates to the retraining and reskilling support available for workers from high-carbon industries. Although skills is a devolved policy area, the UK Government supports a number of relevant initiatives on the development of clean energy skills in Scotland, particularly in the northeast. In evidence to us, Michael Shanks told us about the importance of both governments working together on skills policy. He said there is broad agreement on energy policy and that both governments want the same outcomes for workforces across the country.²⁰⁹

92. For instance, the UK Government in partnership with the Scottish Government launched a dedicated fund to help offshore workers transition into roles in clean energy sectors in July 2025. The Oil and Gas Transition Training Fund, backed by £900,000 of UK Government funding, will be delivered by the Scottish Government agency, Skills Development Scotland. Applications were open to current and former oil and gas workers who live in or are employed in Aberdeen or Aberdeenshire and are interested in moving into clean energy roles.²¹⁰ The fund was launched as part of the UK Government’s round of regional skills pilots in areas identified as key growth regions for clean energy, which included Aberdeen and Aberdeenshire. The pilot scheme also involves other support measures such as new training centres and relevant courses for clean energy sector training.²¹¹

93. In addition to this, the Energy Skills Passport—an online tool designed to help workers within the oil and gas industry identify qualifications and career pathways within the energy sector—is another example of UK Government involvement in skills initiatives in Scotland.²¹² While primarily an industry-led initiative, the passport receives funding support from both governments. A pilot was launched in January 2025 and a full version is expected to rollout later this year.²¹³

94. As discussed earlier, the existing oil and gas workforce should be able to transition to new energy sectors as many skills are transferable. However, we have heard that routes to new sectors are not straightforward. There is no obvious place or service that employers or skills providers can point workers to, which would provide all the information a transitioning worker would need.²¹⁴ Moreover, we heard that training costs are high and often fall on workers.²¹⁵

95. Prior to the Government announcing the Oil and Gas Transition Training Fund, several witnesses told us of the need for a dedicated transition fund to support offshore workers looking to change sector.²¹⁶ For example, Energy UK said a ringfenced and accessible training fund for oil and gas workers would ensure that as the UK decarbonises, there are viable pathways out of high-carbon jobs.²¹⁷ Wind energy developer, Ocean Winds, said a clean energy skills fund would prevent duplication of skills programmes and help employers to retain and attract talent.²¹⁸ Meanwhile, Offshore Energies UK called for skills funding that is flexible so that programmes can be adapted to suit local market needs.²¹⁹ Witnesses representing Scotland’s further education sector all highlighted how previous schemes supporting individuals to transition, the National Transition Training Fund and the Flexible Workforce Development Fund (both Scottish Government initiatives), have been cut.²²⁰

96. Some submissions highlighted that a transition fund does not need to come solely from the public purse. Jim Brown, Director at Energy Skills Partnership, suggested the use of co-investment funds, funded through community benefits from new energy infrastructure or private sector investment, as an alternative to a publicly funded scheme.²²¹ Similarly, Ocean Winds suggested a clean energy skills fund could be supported by contributions from developers.²²²

97. We also heard concerns that the type and nature of jobs within new energy sectors will not be comparable to existing oil and gas jobs. For example, we heard that clean energy jobs are not commensurate in salary with those currently in the oil and gas sector, which disincentivises workers from transition. Although evidence to our inquiry suggested that clean energy jobs are generally better paid by almost £10,000 compared to the UK annual average wage,²²³ lower salaries in renewables than in oil and gas are often cited as a barrier to transitioning workers.²²⁴ Worse terms and conditions in clean energy sectors have also been reported, including a lack of unionised jobs and a prevalence of fixed-term positions during construction phases rather than long-term employment.²²⁵ We heard that fewer operational roles will be created—for example, wind farms typically require fewer operational personnel than oil rigs.²²⁶ There is also the concern that clean energy jobs will not be created in the areas where oil and gas jobs are lost.²²⁷ Energy Transition Institute Director, Paul de Leeuw, made the point that the challenge is less about whether skills are transferable and more about how Government actually mobilises those skills into jobs.²²⁸

Communicating the transition to workers

100. Evidence to this inquiry suggested that the UK Government could communicate better to both oil and gas workers and potential new entrants to the energy sector about the transition, and what it means for jobs.²²⁹ For example, Climate Change Committee Chief Executive Emma Pinchbeck told us there has been a “failure of communication” by the UK Government to oil and gas workers about what they need to do to prepare for transition.²³⁰ Following fieldwork in Aberdeen, the Climate Change Committee found oil and gas workers did not think the sector was going to decline.²³¹ Ms Pinchbeck said that it is for the Government to provide very clear information about the condition of the basin and the likely changeover to clean energy. She said the Government needed to do more of a communications programme, engaging with impacted communities, to explain why it is pursuing its decarbonisation agenda.²³² Michael Shanks told us that he recently joined a roundtable in Aberdeen to discuss how the Government communicates its plan for the North Sea’s future and he acknowledged that the Government has a “critical role” here, but did not elucidate further.²³³

101. Evidence to our inquiry also suggested the visibility and promotion of clean energy jobs could be improved.²³⁴ Energy skills agency OPITO told us government action is required to ensure skilled workers can actually find and apply for the jobs needed to drive the UK energy transition.²³⁵ Similarly, SSE highlighted the need to establish communication pathways to ensure workers are aware of the opportunities available.²³⁶ We heard the offshore wind industry is not good at communicating job roles, with most vacancies promoted through LinkedIn.²³⁷ Meanwhile, Strathclyde University’s Centre for Energy Policy challenged the use of the term ‘green jobs’ in government communications and job adverts, which it said is not well-understood and fails to recognise the numerous roles across sectors that contribute to the Clean Energy Mission.²³⁸

102. Evidence to us highlighted that communications to potential new entrants to the energy sector should be ramped up, in addition to existing oil and gas workers.²³⁹ Energy Skills Partnership Director, Jim Brown, said that while most of the discussion is about the transition of existing workers, there is minimal awareness among the school population of the huge number of opportunities coming down the track in clean energy sectors.²⁴⁰ Neil Cowie, Principal of North East Scotland College, said the current narrative around the North Sea is negative and a barrier to young people entering the energy industry:

What people are picking up or feeling at home and in school is going to have a sway over how those young people decide to follow an employment path. The uncertainty that there is around [ … ] how we are currently treating the North Sea and those operating in it is causing a concern and casting a bit of a shadow over the idea that there are going to be opportunities to have full and fruitful careers.²⁴¹

Representatives from Scotland’s college sector told us it is well positioned to communicate with both new entrants and existing workers about transition, but that it must be supported by governments to be able to do that.²⁴²

5 Grangemouth oil refinery

105. During the course of our inquiry, we took a particular interest in the events unfolding at the Grangemouth oil refinery after the operator announced its closure in November 2023. Our concern stemmed from both the impact on livelihoods and communities and its significance as a case study of the Government’s management of Scotland’s energy transition at large.

106. The oil refinery at Grangemouth was in operation for over a hundred years and was Scotland’s only oil refinery before operations ceased in April 2025.²⁴³ It is currently owned by Petroineos, a refining and energy trading joint venture between Chinese state-owned PetroChina and the London-based company, INEOS.²⁴⁴ In November 2023 Petroineos first announced its intention to transition the Grangemouth refinery into a fuels import terminal and distribution hub.²⁴⁵

107. Petroineos named the refinery business’ financial losses as the main driver behind its decision. Iain Hardie, Head of Legal & External Affairs at Petroineos, said that shareholders had invested £1 billion in the business since Petroineos’ ownership of the refinery in 2011, but had lost over £600 million during the same period.²⁴⁶ During our visit to the refinery, in November 2024, we discussed in great detail the reasons behind the operator’s decision to close the refinery.²⁴⁷ Other drivers cited by Petroineos include:

• the refinery’s age, contributing to low-performance, energy inefficiencies and high operating costs;
• the growth of electrical and hybrid vehicles in the UK leading to a reduction in demand for fuel; and
• the Government’s decision to ban diesel and petrol cars from 2025 and 2030 respectively, again reducing UK demand for fuel.²⁴⁸

108. In September 2024 Petroineos confirmed the refinery’s transition into an import terminal would happen during the second quarter of 2025, but that this would require only 65 full-time workers, down from the roughly 500 employed at the refinery.²⁴⁹ A feasibility study, jointly funded by the UK and Scottish governments, known as Project Willow, was launched in August 2024 to examine different large-scale industrial options for Grangemouth’s future, beyond the refinery’s transition into an import terminal.²⁵⁰ The following February the Scottish Government announced £25 million to establish a Just Transition Fund for Grangemouth, bringing the total it had committed or already invested in Grangemouth to £87 million.²⁵¹ Soon after, the Prime Minister committed to £200 million of National Wealth Fund investment, towards the replacement industry or industries at Grangemouth.²⁵² The Prime Minister expressed his hope that this £200 million commitment would incentivise private investment and therefore expedite Project Willow’s delivery.²⁵³

109. By March 2025 the Project Willow authors at consultancy firm EY Parthenon had published their findings.²⁵⁴ Refining at Grangemouth officially ceased the following month, in line with Petroineos’ expectation. As a result, the sequence of events has created an employment gap for those workers who have been made redundant.²⁵⁵ There is still a lack of clarity about what the new industry will be, the types of jobs it will recruit for, and when they will be up and running. A taskforce, co-chaired by ministers from both governments, is now carrying out checks on potential investment proposals for future industries at the site. At the same time, a separate UK Government taskforce is considering Project Willow’s recommendations on improving the regulatory environment for investment.²⁵⁶

Government awareness of the refinery closure

110. During our inquiry, there was uncertainty about when the UK and Scottish governments first knew about Petroineos’ plans to close its refinery operations at Grangemouth. This raised questions about whether either or both governments could have intervened sooner and therefore prevented job losses or reduced the employment gap.

111. The Secretary of State for Scotland was reported in the media in March 2025 to have said that both governments knew about plans to close the refinery for almost a decade.²⁵⁷ Meanwhile, Unite, the trade union representing the majority of workers at Grangemouth, told us that Petroineos communicated the refinery’s potential closure to both governments two years ago.²⁵⁸

112. In oral evidence, Iain Hardie from Petroineos confirmed that both the UK and Scottish governments knew about the oil refinery’s financial losses and potential closure for as long as five years before the refinery’s closure. Mr Hardie said there were conversations five years ago about the need to convert the business to an import terminal and the hurdles to transitioning to low-carbon manufacturing.²⁵⁹ Mr Hardie cited the change in UK Government in July 2024 as a turning point in planning for Grangemouth’s transition, when the pace picked-up and Project Willow got underway.²⁶⁰

113. Due to the change in UK Government, Michael Shanks said he cannot access correspondence that would confirm exactly when the previous Government was first informed of Petroineos’ plans to close the refinery. However, he said it is “deeply regrettable” that preparation did not start sooner and wishes he had been in a position to do more for Grangemouth’s transition five years ago.²⁶¹

Impact on the workforce and community

114. Petroineos sent redundancy letters to refinery workers in February 2025. We heard that 470 workers were taken through the redundancy consultation process, resulting in 377 voluntary redundancies and 28 compulsory redundancies. A transition team of 170 roles will operate for 12 to 18 months while the business transitions from a refinery to an import terminal, after which the terminal will slim down to just 65 full-time roles.²⁶² Iain Hardie from Petroineos confirmed they had facilitated 36 workers to move to roles at its parent company INEOS and 18 apprentices to finish their training at local employers.²⁶³

115. We also heard that there will be knock-on redundancies within the INEOS businesses at Grangemouth, due to the refinery’s closure.²⁶⁴ An impact assessment by PwC found that when in operation the refinery supported 2,800 jobs. This figure includes roughly 500 people directly employed by the refinery, as well as those in the broader supply chain and local economy. According to the assessment, the redundancies will trigger a £403 million deficit yearly to the local economy.²⁶⁵

116. In oral evidence to us, trade unions Unite and GMB emphasised the importance of a just transition for the workers and communities of Grangemouth.²⁶⁶ Unite represents the refinery’s core workforce, while GMB represent sub-contractors at the site.²⁶⁷ For GMB, a just transition means communities are protected from the negative effects of transition and not left behind.²⁶⁸ Robert Deavy, Scotland Senior Organiser at GMB, told us that Petroineos’ management of the process had effectively thrown 500 of its own employees on the “scrap heap without a second thought for these people’s futures”. Mr Deavy told us the poverty that is already in Grangemouth will now “significantly increase” with the loss of these jobs.²⁶⁹ Similarly, Derek Thomson from Unite described the knock-on effects of redundancies on the area as “absolutely devastating”.²⁷⁰ Mr Thomson said redundancies are only the tip of the iceberg, with rippling negative impacts on seasonal contractors and the local economy, namely hotels, restaurants and pubs. He said that every shopkeeper in Grangemouth is currently fearful for their future.²⁷¹

117. The new industrial mix will likely take some years to replace the employment lost from the refinery.²⁷² Project Willow proposed nine projects that could create up to 800 direct operational jobs by 2040 (approximately double the amount of refinery jobs lost) or 1,200 in a best-case scenario involving high levels of investment. However, the earliest proposals could only feasibly begin in 2028 and, as with all the projects outlined in Project Willow, they are contingent on large amounts of both public and private investment and, in some cases, regulatory reform.²⁷³ The Government acknowledged that, although there is an employment gap, it is confident that employment will return to Grangemouth.²⁷⁴

Grangemouth as a test case

118. Several witnesses described Grangemouth as a test of governments’ management of the energy transition.²⁷⁵ Similarly, Scotland’s Just Transition Commission described Grangemouth as a test case that provides a reference point for how the transition away from high-carbon emitting industry is currently being managed for workers, communities and businesses.²⁷⁶

119. Both Mr Hardy and Mr Thomson from Unite pointed to Grangemouth as demonstrating both the need for governments to improve their just transition planning and the importance of pacing the net zero transition properly.²⁷⁷ Mr Hardy told us that Petroineos ought to have had an exit plan, which could have allowed for a controlled process where workers had sufficient time to process the change, greater employment protections and clarity about their future. Mr Hardy said this is not what happened at Grangemouth, where a decision was taken in January and jobs were gone by November. For this reason, he described Grangemouth as a “shining example” of how not to manage a just transition.²⁷⁸ Similarly, Mr Thomson told us Grangemouth demonstrates that the UK failed its first test of a just transition.²⁷⁹

120. We heard that energy transitions that have gone well in the past have been characterised by governments taking a steering role, in coalition with trade unions and community groups.²⁸⁰ When considering how to intervene in the refinery’s closure, Michael Shanks said he looked at every possible option including bringing the site into public ownership, but that the Government is “not in the business of nationalising failing businesses”.²⁸¹ Instead, the Government put in place a skills training programme for workers, co-funded by both governments and delivered by the Forth Valley College.²⁸² The UK Government’s support package amounted to £10 million, covering the cost of a skills-mapping exercise, retraining courses, and the offer of a one-to-one interview between workers and a career specialist, termed its ‘training guarantee’.²⁸³

121. Witnesses representing both Unite and the Just Transition Commission called for greater conditionality around the use of public funds in cases such as Grangemouth.²⁸⁴ The Just Transition Commission said that the situation at Grangemouth demonstrates the absence of a clear set of expectations on high carbon employers, and sets a dangerous precedent for private companies to exit a business without adequate planning. This leaves governments to front the cost of transition and effectively subsidises private companies in the process. The advisory body recommended that governments work to ensure that companies with responsibility for high carbon-emitting industrial sites consult their workers in advance of publishing a just transition plan, which should demonstrate how they will manage the social impacts of transition.²⁸⁵

122. Iain Hardie from Petroineos believes Project Willow and its findings have wider relevance and application to other decarbonising industries across the UK and can provide a template for businesses.²⁸⁶ Similarly, Project Willow co-author and Head of Energy Transition Strategy at EY Parthenon, Anu Bhambi, described the project as:

A real opportunity for change in the UK. It is the first of its kind where you can bring together circularity, energy transition, build out security of supply, and yes, it applies to other opportunities within the UK.²⁸⁷

123. We have heard repeatedly about the importance of learning lessons from previous transitions.²⁸⁸ Kenneth MacInnes, Principal of Forth Valley College, told us that the main lesson learned from Grangemouth is that governments should have intervened sooner to prevent the formation of a skills and employment gap at Grangemouth; a lesson that is applicable to the energy transition at large.²⁸⁹ Just Transition Commissioner, Richard Hardy, emphasised that Grangemouth highlights the importance of honesty during a transition process—that companies ought to set out a long-term plan and be honest about what they will do next and what transition means for workers. Mr Hardy uses the example of the closure of the Longannet coal-fired power station in 2016, where operator ScottishPower had a long-term five to eight year exit plan in place to prepare workers for transition.²⁹⁰ Likewise, Fraser Stewart, Just Transition Lead at energy think tank Regen, told us that the main lesson to learn from previous transitions is for governments to take a much longer perspective and plan beyond 2030, even as far ahead as 2045. He said long-term planning is the only way to capitalise on the opportunity of energy transition ahead of us.²⁹¹

Project Willow next steps

126. The Project Willow report, published on 19 March 2025, sets out nine areas where there are potential opportunities for low-carbon industries at Grangemouth. We heard that the EY Parthenon team, which authored the report, evaluated 368 technologies to identify those that could be effectively deployed at the site, before finally landing on nine projects that fall into three main categories: waste, Scottish bioresources (such as sustainable aviation fuel), and support for the hydrogen economy.²⁹²

127. The headline finding from the study is that the site will require substantial capital investment, approximately £3.5 billion from the private sector, as well as the development of new supply chains in order to scale up the proposed projects. The final report concluded that 800 direct operational jobs could be created by 2040, or up to 1,200 in a ‘growth’ scenario. It is forecast that most jobs during the development phase will be in construction, while future industries are expected to primarily employ operators, maintenance technicians and engineers. It also found that the site’s annual total GVA contribution could range from £600–700 million or as much as £1–2 billion with growth by 2040; and that greenhouse gas emissions from the site could be reduced by 3.5–6 million tonnes each year (compared with the operational refinery’s emissions).²⁹³

Investment taskforce

128. Following Project Willow’s publication, the Grangemouth Investment Taskforce Board—consisting of representatives from both governments, Scottish Enterprise, National Wealth Fund, Scottish National Investment Bank and Office for Investment—was set up to examine any private investment proposals for the site.²⁹⁴ Michael Shanks told us the Board, which he co-chairs alongside Scottish Government Cabinet Secretary Gillian Martin MSP, is taking a proactive approach to investors and trying to get projects over the line as quickly as possible.²⁹⁵

129. Although the Grangemouth Investment Taskforce Board is co-chaired by both governments, Iain Hardie from Petroineos told us its next phase is being managed by Scottish Enterprise, the Scottish Government’s national development agency.²⁹⁶ Michael Shanks said that Scottish Enterprise is handling due diligence checks for the Board on any projects that come forward.²⁹⁷ Mr Shanks told us he was optimistic that a number of the 84 projects²⁹⁸ that had already come forward were credible, deliverable, and would have a positive impact on local jobs.²⁹⁹ A Scottish Enterprise representative told a Scottish Parliament committee in June 2025 that it had received a mixture of inquiries from businesses and suggested that the proposed projects could be realised in the next three to four years.³⁰⁰

130. Once proposals are checked by Scottish Enterprise, the process will turn to the National Wealth Fund for the actual investment ask.³⁰¹ Crucially, the Prime Minister announced £200 million of ring-fenced National Wealth Fund investment.³⁰² The Government has emphasised how this is the first time the National Wealth Fund has made a pre-emptive decision to ringfence money in this way.³⁰³ The Government has also said that the National Wealth Fund will consider projects above £200 million, as the amount available to private investors is not capped. However, it has acknowledged that the current commitment could clearly not deliver Project Willow proposals on its own and is primarily intended to attract private sector investment.³⁰⁴

131. Despite the fact that this commitment was made by the Prime Minister, the Government reassured us that the National Wealth Fund’s analysis will be operationally independent from Government, in keeping with the body’s independence.³⁰⁵ Whether the £200 million ringfenced pot will be spent and how it will be deployed will depend on the projects that come forward and whether they meet the National Wealth Fund’s investment criteria. These criteria stipulate that investment should support the Government’s growth and clean energy missions, invest in capital intensive projects, deliver a positive financial return, and crowd in significant private capital over time.³⁰⁶

132. Broadly speaking, witnesses welcomed the Government’s £200 million commitment.³⁰⁷ Project Willow co-author Anu Bhambi said the move provided a “real signal to the private sector that the Government means business”.³⁰⁸ However, Derek Thomson from Unite raised concerns about how easily the £200 million could be deployed due to the number of steps in the application process.³⁰⁹

133. Meanwhile, we were cautioned by Mr Bhambi that maintaining pace and momentum behind Project Willow will be vitally important to ensure success.³¹⁰ This urgency was also echoed by Kenneth MacInnes from the Forth Valley College, the college providing the Government’s skills package for refinery workers, who warned of a skills gap emerging at Grangemouth. He said that to service the new industries at the site, such as biotech and hydrogen, work towards priming those skills needs to start now. This is especially the case if new entrants are required since apprenticeships and graduate programmes usually last for four to five years.³¹¹

Taskforce on regulatory recommendations

134. Iain Hardie from Petroineos told us that investment alone will not create a successful transition for Grangemouth because the regulatory hurdles identified in Project Willow also need to be addressed.³¹² Mr Hardie was clear that governments now needed to “do their bit” and move with pace and rigour to address the regulatory changes articulated in Project Willow.³¹³ Mr Hardie told us that Petroineos maintains a “strong interest” in the site’s future, and will continue to work on Project Willow in “every available capacity”, as landlord, utility provider and project developer.³¹⁴ The company also retains a stake in Grangemouth’s future because of its transition to an import terminal business at the site.³¹⁵

135. Project Willow identified policy and regulatory recommendations for both the UK and Scottish governments, with the aim of unlocking significant private investment. Recommendations were numerous and related to topics such as government funding initiatives, the role of state-sponsored investment, changes to the electricity market to reduce costs, biofuels market reform, and incentives for low carbon chemicals and plastics.³¹⁶

136. The Government set up a cross-government taskforce to look at those recommendations which lie outside the Scottish Government’s remit. However, there is currently a lack of clarity on how the taskforce will feed into any decisions about Grangemouth’s future. Michael Shanks told us that the taskforce is looking at all the points raised by Project Willow to identify what is possible. Yet at the same time, Mr Shanks said the taskforce is specifically looking at the regulatory reform needed to deliver the projects that have come forward “rather than just looking at change for the sake of it”.³¹⁷ This lack of clarity on the driver of change here raises the question: will the investment proposals that come forward determine the regulatory changes the Government bring forward or is it necessary for the Government to bring forward those changes first to unlock that private investment?

Conclusions and recommendations

Why does the North Sea transition matter?

1. 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 is progressing more slowly than the decline of the oil and gas sector. The Government should avoid accelerating the decline of North Sea oil and gas production through its policy environment while this remains the case. (Conclusion, Paragraph 52)

The Government should urgently address this gap with increased Government investment proportionate to the scale of the challenge. The Government must set out clearly how its investments and policy environment will create the jobs and revenue necessary to replace the jobs being rapidly lost in North Sea oil and gas. (Recommendation, Paragraph 52)

2. 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 the UK. This represents not only the loss of world-renowned skills and expertise in the energy sector, but also a significant hit to regional economies, population dynamics, demographics and communities. (Conclusion, Paragraph 53)

3. 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. Easing the gradient of production decline means higher economic returns, lower emissions, and anchors jobs and skills in the northeast of Scotland, which will be necessary for the rapid growth of clean energy sectors. (Conclusion, Paragraph 54)

4. 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 as an outcome of its consultation, Building the North Sea’s Energy Future. In its response to this report, the Government should clarify how developers may be permitted to undertake additional drilling activity under existing exploration licences. (Recommendation, Paragraph 55)

5. 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 generators. (Recommendation, Paragraph 56)

Tax and regulatory environment

6. 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%, which brings the headline rate of tax to 78%, is seen by many in industry as no longer proportionate. We are concerned that without reform the levy will accelerate the decline of the North Sea oil and gas industry and its associated supply chain, resulting in job losses. The UK will require oil and gas in its energy mix for decades to come and the fiscal regime should reflect that. (Conclusion, Paragraph 66)

7. 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 into effect as soon as possible, rather than replacing the Energy Profits Levy from 2030. (Recommendation, Paragraph 67)

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)

9. 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 justification is vital to ensure the industry and wider public can understand and be confident in the Government’s stewardship of the North Sea continental shelf. (Recommendation, Paragraph 76)

Managing the transition

10. 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 developing our recommendations to the Government while it develops its own North Sea transition plan. Unite’s clear failure to supply the plan ultimately casts doubt over its existence. (Conclusion, Paragraph 83)

11. 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 a plan in dialogue with industry, trade unions and communities, is a welcome start but is moving too slowly. (Conclusion, Paragraph 89)

12. 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, provide certainty to the sector, and speak directly to the challenges faced by the communities in the northeast of Scotland, who are disproportionately affected by the UK’s transition away from oil and gas. We recommend that the Government’s transition plan contains specific and measurable outcomes on increasing the transfer of skills from the oil and gas industry to new sectors, with clear commitments from both governments and industry on how to achieve them. This could include target figures for oil and gas workers transitioning into specific industries, for clean energy job creation, and data on the UK supply chain content in both oil and gas and renewable energy activity. (Recommendation, Paragraph 90)

13. 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 particular, we welcome the establishment of the Oil and Gas Transition Training Fund. Access to an effective training fund will serve as an incentive for workers to transition and shows that the Government is serious about supporting people into the jobs of the future. A Government-led training fund will also improve ministerial accountability and coordination of the North Sea energy transition at a national level. (Conclusion, Paragraph 98)

14. 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 involvement in the scheme, to ensure sufficient accountability at a UK level. In its response, the Government should outline whether it has considered how co-investment plans with the private sector or the revenue generated by the Energy Profits Levy could finance the transition fund in the long term. (Recommendation, Paragraph 99)

15. 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 of clean energy jobs, as well as to ensure existing workers are aware of the reality of transition and that these new opportunities are available to both prospective and existing workers. (Conclusion, Paragraph 103)

16. 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 the sector. This should include information about skills transferability between oil and gas and other sectors and should also signpost how to find relevant job opportunities. (Recommendation, Paragraph 104)

Grangemouth oil refinery

17. 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)

18. 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 during its consultation on Building the North Sea’s Energy Future, we recommend that the Government set out principles in its consultation response which outline the conditions and actions that constitute a just transition for workers and communities and draw on best-practice examples. These principles can act as a guide and create an expectation for transitioning high-carbon companies to produce an exit plan that benefits workers and communities. We recommend principles that emphasise the importance of early government intervention in industrial transition, proactive engagement with workers and communities, and which aim to maximise good, long-term and well-paid jobs. (Recommendation, Paragraph 125)

19. 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 investment in Grangemouth’s future. However, more clarity is needed on how decisions about investable proposals will be made, and how the Government’s taskforce on Project Willow recommendations will feed into the investment taskforce. This is crucial as it is potentially in the Government’s gift to unlock certain projects through regulatory changes. (Conclusion, Paragraph 137)

20. 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 Board in relation to the allocation of the £200 million National Wealth Fund funding. It should clarify whether the speed at which a new project at Grangemouth can begin, as well as the number and quality of jobs to be created, will be taken into account when making decisions about investable proposals. (Recommendation, Paragraph 138)

Formal minutes

Wednesday 15 October 2025

Members present

Patricia Ferguson, in the Chair

Maureen Burke

Harriet Cross

Lillian Jones

Mr Angus MacDonald

Douglas McAllister

Susan Murray

Kirsteen Sullivan

The future of Scotland’s oil and gas industry

Draft Report (The future of Scotland’s oil and gas industry), proposed by the Chair, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 138 read and agreed to.

Summary agreed to.

Resolved, That the Report be the Fourth Report of the Committee to the House.

Ordered, That the Chair make the Report to the House.

Ordered, That embargoed copies of the Report be made available in accordance with the provisions of Standing Order No. 134.

Adjournment

Adjourned till Monday 20 October at 9.00 am, in Glasgow.

Witnesses

The following witnesses gave evidence. Transcripts can be viewed on the GB Energy and the net zero transition inquiry publications page of the Committee’s website.

Wednesday 22 January 2025

Emma Pinchbeck, Chief Executive, Climate Change Committee; Owen Bellamy, Head of Energy Supply Decarbonisation and Resilience, Climate Change Committee; Ameena Camps, Commissioner, Just Transition Commission; Richard Hardy, Commissioner, Just Transition CommissionQ1–20

Professor Paul de Leeuw, Director, Robert Gordon University Energy Transition Institute; Hannah Corbett, Senior Knowledge Exchange Fellow, University of Strathclyde Centre for Energy Policy; Fraser Stewart, Just Transition Lead, RegenQ21–28

Wednesday 26 February 2025

Russell Borthwick, Chief Executive, Aberdeen & Grampian Chamber of Commerce; Neil Gordon, Chief Executive, Global Underwater Hub; Becca Groundwater, Head of External Affairs, Energies Industries Council; Jenny Stanning, External Relations Director, Offshore Energies UKQ29–56

Hebe Trotter, Vice President, Global Government Relations, Harbour Energy; Louise Kingham CBE, Senior Vice President, Europe & Head of Country UK, BPQ57–72

Wednesday 19 March 2025

Robert Deavy, Scotland Senior Organiser, GMB; Ian Perth, Negotiations Officer, Prospect; Derek Thomson, Scotland Regional Secretary, Unite the UnionQ73–105

Wednesday 2 April 2025

Anu Bhambi, Head of Energy Transition Strategy, EY Parthenon; Iain Hardie, Head of Legal & External Affair, Petroineos; Colin Pritchard, Sustainability & External Relations Director, INEOSQ106–171

Wednesday 14 May 2025

Kenneth MacInnes, Principal, Forth Valley College; Neil Cowie, Principal, North East Scotland College; Jim Brown, Director, Energy Skills PartnershipQ172–204

Doug Duguid, Chief Executive, Aurora Energy Services; Gavin Templeton, Chief Executive, Veri Energy; Lynsey Benson, Head of Policy and External Affairs, Engineering Construction Industry Training BoardQ205–224

Wednesday 2 July 2025

Michael Shanks MP, Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero; Michael Brannan, Co-Deputy Director, Offshore Energy Transition and Coal Legacy, Department for Energy Security and Net ZeroQ225–275

Published written evidence

The following written evidence was received and can be viewed on the GB Energy and the net zero transition inquiry publications page of the Committee’s website.

NRG numbers are generated by the evidence processing system and so may not be complete.

1 Aberdeen & Grampian Chamber of Commerce NRG0030

2 British Chambers of Commerce NRG0019

3 Centre for Energy Policy, University of Strathclyde NRG0047

4 Comhairle nan Eilean Siar (Local Authority for Western Isles of Scotland) NRG0002

5 Community Energy Scotland NRG0024

6 Crown Estate Scotland NRG0041

7 Decom Mission NRG0028

8 Department for Energy Security and Net Zero NRG0031

9 Development Trusts Association Scotland NRG0033

10 EDF Renewables UK NRG0003

11 EnBW Generation UK NRG0021

12 Energy Industries Council NRG0004

13 Energy Transition Zone Ltd NRG0050

14 Energy UK NRG0039

15 Engineering Construction Industry Training Board NRG0022

16 European Marine Energy Centre Ltd (EMEC) NRG0005

17 Flotation Energy Ltd NRG0009

18 Friends of the Earth Scotland NRG0020

19 Glen Earrach Energy NRG0023

20 Global Underwater Hub NRG0013

21 Helmcke, Dr Cornelia (Senior Policy Fellow, Centre for Energy Ethics | University of St Andrews) NRG0051

22 Highlands and Islands Enterprise NRG0042

23 Inverness and Cromarty Firth Green Freeport NRG0035

24 Liquid Gas UK NRG0010

25 Marine Energy Council (MEC) NRG0046

26 Mineral Products Association Scotland NRG0012

27 Nuclear Industry Association NRG0001

28 OFTEC and UKIFDA NRG0016

29 OPITO NRG0006

30 ORE Catapult NRG0040

31 Ocean Winds NRG0015

32 Offshore Energies UK NRG0038

33 Policy and Innovation Group, University of Edinburgh NRG0017

34 Port of Aberdeen NRG0007

35 Professor John Underhill and Professor Alex Kemp at University of Aberdeen NRG0025

36 Prospect NRG0014

37 RWE NRG0018

38 SSE plc NRG0043

39 Scottish Enterprise NRG0034

40 Scottish Government NRG0045

41 Scottish National Investment Bank NRG0048

42 Scottish Renewables NRG0037

43 Scottish Trades Union Congress NRG0026

44 Shetland Island Council NRG0032

45 South of Scotland Enterprise NRG0049

46 Statera Energy NRG0036

47 Storegga NRG0044

48 Trades Union Congress (TUC) NRG0029

49 Uplift NRG0011

50 Vargronn NRG0027

List of Reports from the Committee during the current Parliament

All publications from the Committee are available on the publications page of the Committee’s website.

Session 2024–26

Number	Title	Reference
3rd	Problem drug use in Scotland follow-up: Glasgow’s Safer Drug Consumption Facility	HC 630
2nd	Scotland’s space sector follow-up: launch	HC 671
1st	The financing of the Scottish Government	HC 456
3rd Special	The financing of the Scottish Government: Government response	HC 1357
2nd Special	Scotland’s space sector: Government response	HC 801
1st Special	Science and Scotland: Government response	HC 800

---

Footnotes

1 Offshore Energies UK, Economy and People Report 2024, July 2024, p.22–23

2 Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025, p.3; Offshore Energies UK, Business Outlook Report 2025, March 2025, p.39

3 Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025. p.22

4 Department for Energy Security and Net Zero, UK Energy in Brief 2025, 31 July 2025, p.11. Not all oil and gas consumed in the UK is domestically produced, and not all domestically produced oil and gas is consumed in the UK.

5 Office for Budget Responsibility, The evolution of North Sea oil and gas receipts, (accessed 7 July 2025).

6 Oil and Gas UK, Economic Report, September 2017, p.15; Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025. p.3

7 Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025. p.3

8 Prime Minister’s Office, Plan for Change, 5 December 2024, p.39

9 Prime Minister’s Office, Plan for Change, 5 December 2024, p.39–43

10 Department for Energy Security and Net Zero, UK’s 2035 Nationally Determined Contribution (NDC) emissions reduction target under the Paris Agreement, 30 January 2025

11 The UK’s clean energy future, HCWS502, 5 March 2025

12 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.59

13 Publication of environmental guidance, HCWS719, 19 June 2025

14 Visit note - Scottish Affairs Committee visit to Rosyth, Grangemouth, Aberdeenshire and Inverness - November 2024; Visit Note – Scottish Affairs Committee visit to Norway – March 2025; Visit Note – Scottish Affairs Committee visit to Shetland - May 2025; Visit note - Visit to Loch Sloy Hydro-Electric Scheme - August 2025

15 Scottish Affairs Committee, Sixth Report of Session 2017–19, The future of the oil and gas industry, HC 996, 4 February 2019

16 Uplift (NRG0011); Aberdeen & Grampian Chamber of Commerce (NRG0030); Offshore Energies UK (NRG0038)

17 Uplift (NRG0011); Offshore Energies UK (NRG0038); Scottish Government (NRG0045); Scottish National Investment Bank (NRG0048); South of Scotland Enterprise (NRG0049); Q4; Q15; Q24; Q31; Q47

18 Q4 [Owen Bellamy]; Q24 [Paul de Leeuw]; Department for Energy Security and Net Zero, Digest of UK Energy Statistics (DUKES), 31 July 2025, Table 4.1 (gas), Table 3.2 (oil)

19 Department for Energy Security and Net Zero, Digest of UK Energy Statistics (DUKES), 31 July 2025, p.1

20 North Sea Transition Authority, Production and expenditure projections, March 2025, (accessed 21 July 2025)

21 Q4 [Owen Bellamy]; North Sea Transition Authority, Production and expenditure projections, March 2025, (accessed 21 July 2025)

22 Q24 [Paul de Leeuw]; Department for Energy Security and Net Zero, UK Energy in Brief 2024, 30 July 2024, p.11, p.20

23 North Sea Transition Authority, Overview 2025, 19 February 2025, p.22; Offshore Energies UK, Key facts: Offshore energy in numbers, (accessed 6 August 2025)

24 Department for Energy Security and Net Zero, Digest of UK Energy Statistics Annual data for UK 2024, 31 July 2025, Table 3.1 and 4.1

25 Offshore Energies UK, Business Outlook Report 2025, 2025, p.7

26 Department for Energy Security and Net Zero, Energy Trends: UK gas, updated 28 August 2025

27 E.g. in 2024 80%-90% of the oil refined in the UK was imported. (Department for Energy Security and Net Zero, Digest of UK Energy Statistics Annual data for UK 2024, 31 July 2025, Table 3.1)

28 Q15 [Emma Pinchbeck]

29 Climate Change Committee, Seventh Carbon Budget, February 2025, p.362–4

30 Climate Change Committee, Seventh Carbon Budget, February 2025, p.370

31 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.3

32 Department for Energy Security and Net Zero, Clean Power 2030 Action Plan: A new era of clean electricity, December 2024, p.11; Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.17–18

33 Q227

34 Labour Party, Change: Labour Party Manifesto 2024, June 2024 p.52

35 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.6

36 Qq234–235

37 Qq235–236

38 Q225 [Michael Shanks]; Department for Energy Security and Net Zero (NRG0031)

39 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.15

40 Climate Change Committee, Seventh Carbon Budget, February 2025, p.337, p.363

41 Q227 [Michael Shanks]; Department for Energy Security and Net Zero, Clean Power 2030 Action Plan: A new era of clean electricity, December 2024, p.108; Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.9, p.20

42 Department for Energy Security and Net Zero, Clean Power 2030 Action Plan: A new era of clean electricity, December 2024, p.25

43 Department for Energy Security and Net Zero, Clean Power 2030 Action Plan: A new era of clean electricity, December 2024, p.29

44 Climate Change Committee, Seventh Carbon Budget, February 2025, p.215

45 Department for Energy Security and Net Zero (NRG0031)

46 Department for Energy Security and Net Zero (NRG0031)

47 Qq24–25 [Paul de Leeuw]; Q75 [Derek Thomson, Ian Perth, Robert Deavy]; Q231 [Michael Shanks]; Uplift (NRG0011)

48 Robert Gordon University Energy Transition Institute, Striking the balance, June 2025, p.3; Offshore Energies UK, Business Outlook Report 2025, March 2025, p.39

49 Robert Gordon University Energy Transition Institute, Striking the balance, June 2025, p.22

50 The offshore energy industry comprises oil and gas, offshore wind, carbon capture and storage, offshore hydrogen and associated onshore support activities.

51 Q25 [Paul de Leeuw]; Robert Gordon University Energy Transition Institute, Striking the balance, June 2025, p.5

52 Q25 [Paul de Leeuw]; Robert Gordon University Energy Transition Institute, Striking the balance, June 2025, p.5

53 This report mainly uses figures that include direct and indirect jobs only.

54 Q75 [Derek Thomson, Ian Perth, Robert Deavy]; Q87 [Derek Thomson]; OPITO (NRG0006); Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025);

55 Q10 [Richard Hardy]; Q12 [Ameena Camps]; Q14 [Richard Hardy]; Q73 [Robert Deavy, Derek Thomson, Ian Perth]; Q78 [Ian Perth]; Q212 [Gavin Templeton]; Comhairle nan Eilean Siar (Local Authority for Western Isles of Scotland) (NRG0002); Shetland Island Council (NRG0032)

56 Q73 [Robert Deavy, Derek Thomson, Ian Perth]

57 Q24 [Paul de Leeuw]; Q190 [Kenneth MacInnes]; Q207 [Gavin Templeton]; Scottish Renewables (NRG0037); Storegga (NRG0044)

58 Q46; Q47; Q62 [Neil Gordon]; Energy Industries Council (NRG0004); OPITO (NRG0006); Port of Aberdeen (NRG0007); Global Underwater Hub (NRG0013); Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025); Scottish Trades Union Congress (NRG0026); Decom Mission (NRG0028); Aberdeen & Grampian Chamber of Commerce (NRG0030); Scottish Enterprise (NRG0034); Energy UK (NRG0039); Energy Transition Zone Ltd (NRG0050); Statera Energy (NRG0036); ORE Catapult (NRG0040); Trades Union Congress (TUC) (NRG0029)

59 Department for Energy Security and Net Zero, Assessment of the clean energy skills challenge, 25 March 2025, (accessed 4 August 2025)

60 Q4 [Emma Pinchbeck]; Q68 [Jenny Stanning]; Uplift (NRG0011); Offshore Energies UK (NRG0038); Nuclear Industry Association (NRG0001); Department for Energy Security and Net Zero (NRG0031); Scottish Renewables (NRG0037); Energy UK (NRG0039); Robert Gordon University, Powering up the workforce, September 2023, p.5

61 Oil and Gas UK, Workforce & Employment Insight, 2021, p.7; Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025. p.3

62 Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025. p.3

63 Offshore Energies UK, OEUK accelerates UK-wide summer political engagement campaign to champion the future of the North Sea, 18 August 2025

64 Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025. p.3

65 Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025. p.2

66 Robert Gordon University Energy Transition Institute, Striking the Balance, June 2025, p.19

67 Q20 [Emma Pinchbeck]; Q72 [Jenny Stanning]; Q80 [Ian Perth]; Q212 [Doug Duguid]; Q217 [Gavin Templeton]; European Marine Energy Centre Ltd (EMEC) (NRG0005); Ocean Winds (NRG0015); Scottish Renewables (NRG0037); Offshore Energies UK (NRG0038); SSE plc (NRG0043); Scottish Government (NRG0045)

68 Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025); Scottish Renewables (NRG0037)

69 Scottish Government (NRG0045)

70 ORE Catapult (NRG0040)

71 Ocean Winds (NRG0015); British Chambers of Commerce (NRG0019); Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025); Highlands and Islands Enterprise (NRG0042); SSE plc (NRG0043); Energy Transition Zone Ltd (NRG0050)

72 Department for Energy Security and Net Zero, Clean Power 2030 Action Plan: A new era of clean electricity, December 2024, p.13

73 EnBW Generation UK (NRG0021)

74 Scottish Renewables (NRG0037)

75 British Chambers of Commerce (NRG0019); Decom Mission (NRG0028); Inverness and Cromarty Firth Green Freeport (NRG0035); Crown Estate Scotland (NRG0041); Highlands and Islands Enterprise (NRG0042); Centre for Energy Policy, University of Strathclyde (NRG0047)

76 Q12 [Richard Hardy]; Q68 [Russell Borthwick]; Q212 [Doug Duguid]; Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025); Scottish Trades Union Congress (NRG0026); Trades Union Congress (TUC) (NRG0029) Energy Transition Zone Ltd (NRG0050)

77 Q239

78 Q239

79 Q212 [Gavin Templeton]; Decom Mission (NRG0028); Trades Union Congress (TUC) (NRG0029); Offshore Energies UK (NRG0038); Nuclear Industry Association (NRG0001); Scottish Renewables (NRG0037)

80 Q24 [Paul de Leeuw]

81 Q55 [Louise Kingham, Hebe Trotter]; Q206 [Gavin Templeton]; Scottish Renewables (NRG0037); Storegga (NRG0044)

82 Q212 [Gavin Templeton]

83 Q212 [Gavin Templeton]

84 Offshore Energies UK, Energy Industries Council, Global Underwater Hub and Aberdeen & Grampian Chamber of Commerce

85 Q62 [Jenny Stanning, Becca Groundwater, Neil Gordon, Russell Borthwick]

86 Q62 [Becca Groundwater, Neil Gordon]; Q67 [Russell Borthwick]; Q212 [Gavin Templeton, Doug Duguid]; Q223 [Gavin Templeton]; Q224 [Gavin Templeton; Doug Duguid]; Energy Industries Council (NRG0004)

87 Q58 [Jenny Stanning]; Aberdeen & Grampian Chamber of Commerce (NRG0030); Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025)

88 Q228 [Michael Shanks]

89 Q58 [Jenny Stanning]; Aberdeen & Grampian Chamber of Commerce (NRG0030)

90 HM Revenue & Customs, Government revenues from oil and gas production September 2025, 24 September 2025

91 Office for Budget Responsibility, Economic and fiscal outlook - March 2025, 26 March 2025, p.88

92 Experian, Estimating employment and GVA impact of the UK oil and gas industry, 2024, p.2; Scottish Government, Oil and gas, (accessed 6 August 2025)

93 Offshore Energies UK, Economy & People Report 2024, June 2024, p.23

94 Experian, Estimating employment and GVA impact of the UK oil and gas industry, 2024, p.2

95 Offshore Energies UK, Policy versus geology: new report reveals £165bn choice facing North Sea future, 23 June 2025

96 Qq33–34 [Hebe Trotter]; Aberdeen & Grampian Chamber of Commerce (NRG0030); Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025)

97 Department for Energy Security and Net Zero, Digest of UK Energy Statistics (DUKES), 31 July 2025, Table 4.3

98 North Sea Transition Authority, Emissions Monitoring Report 2023, 5 September 2023

99 North Sea Transition Authority, Natural gas carbon footprint analysis, 2023 (accessed 3 July 2025)

100 Professor John Richard and Professor Alexander Kemp at University of Aberdeen (NRG0025); Climate Change Committee, Progress in reducing emissions - 2025 report to Parliament, June 2025, p.41

101 North Sea Transition Authority, Natural gas carbon footprint analysis, 2023 (accessed 3 July 2025)

102 Statista, Global LNG industry - statistics and facts, 19 March 2025, (accessed 12 August 2025)

103 International Energy Agency, World Energy Outlook, October 2024

104 Department for Energy Security and Net Zero, Supply of Liquefied Natural Gas in the UK 2022, 30 March 2023, p.5–6; Department for Energy Security and Net Zero, Digest of UK Energy Statistics (DUKES) , 31 July 2025, Table 4.5

105 Department for Energy Security and Net Zero, UK Energy in Brief 2025, 31 July 2025, p.12

106 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, 5 March 2025, p.17

107 Q231 [Michael Brannan]

108 Climate Change Committee, Letter to The Rt Hon Kwasi Kwarteng MP, 24 February 2022

109 Q4 [Owen Bellamy]; Q6 [Emma Pinchbeck]; Q93 [Derek Thomson]; OPITO (NRG0006); Liquid Gas UK (NRG0010); British Chambers of Commerce (NRG0019); Aberdeen & Grampian Chamber of Commerce (NRG0030)

110 International Energy Agency, Energy security (accessed 22 July 2025)

111 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, 5 March 2025, p.17

112 Q4 [Emma Pinchbeck]; Climate Change Committee, The Seventh Carbon Budget, 26 February 2025, p.63, p.354; Climate Change Committee, Progress in reducing emissions - 2025 report to Parliament, 25 June 2025; Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, 5 March 2025, p.17

113 Climate Change Committee, Seventh Carbon Budget, February 2025, p.364

114 Q36 [Emma Pinchbeck]

115 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.17; Qq227–228 [Michael Shanks]

116 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.17

117 OPITO (NRG0006); Aberdeen & Grampian Chamber of Commerce (NRG0030); Letter from Offshore Energies UK regarding GB Energy and the net transition inquiry, dated 4 July 2025, 16 July 2025

118 Climate Change Committee, Seventh Carbon Budget, 26 February 2025, Section 10.2

119 Letter from Offshore Energies UK regarding GB Energy and the net transition inquiry, dated 4 July 2025, 16 July 2025

120 Q71 [Russell Borthwick]; Aberdeen & Grampian Chamber of Commerce (NRG0030); Offshore Technology, New Zealand Parliament revokes exploration ban on petroleum resources, 1 August 2025

121 Reuters, IEA chief sees need for investments in existing oil and gas fields, 10 March 2025; International Energy Agency, The path to limiting global warming to 1.5 °C has narrowed, but clean energy growth is keeping it open, 26 September 2023

122 North Sea Transition Authority, NSTA August 2025 Production Projections Plus CCC and DESNZ Demand Projection, Production and expenditure projections (accessed 8 October 2025)

123 Upstream, UK cuts output projections by almost 1 billion barrels, 16 September 2025

124 Q31 [Hebe Trotter]; Q36 [Hebe Trotter]; Q62 [Neil Gordon, Russell Borthwick, Jenny Stanning, Becca Groundwater]; Q67 [Russell Borthwick]; European Marine Energy Centre Ltd (EMEC) (NRG0005); Professor John Richard Underhill and Professor Alexander at University of Aberdeen (NRG0025); Energy UK (NRG0039)

125 Q24

126 Q62 [Neil Gordon, Russell Borthwick]; Q67 [Russell Borthwick]; Q223 [Gavin Templeton]; Q224 [Doug Duguid, Lynsey Benson]

127 Letter from Offshore Energies UK regarding GB Energy and the net transition inquiry, dated 4 July 2025, 16 July 2025

128 Q62 [Neil Gordon]

129 Decom Mission (NRG0028)

130 Energy Industries Council (NRG0004); British Chambers of Commerce (NRG0019); Decom Mission (NRG0028); Aberdeen & Grampian Chamber of Commerce (NRG0030); Energy Transition Zone Ltd; (NRG0050); Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025)

131 HM Revenue & Customs, Energy Profits Levy - reforms 2024, 30 October 2024, (accessed 7 August 2025)

132 HM Revenue & Customs, Energy Profits Levy - reforms 2024, 30 October 2024, (accessed 7 August 2025)

133 HM Treasury, Oil and gas price mechanism consultation, 5 March 2025, (accessed 23 July 2025)

134 Q40 [Hebe Trotter]; Q60 [Russell Borthwick]; Q39 [Louise Kingham]; Energy Industries Council (NRG0004); Professor John Richard Underhill and Professor Alexander Kemp at University of Aberdeen (NRG0025); Decom Mission (NRG0028)

135 Q60 [Russell Borthwick]; Q39 [Louise Kingham]

136 An independent group established to guide the North Sea Transition, comprised of expert members from academia, industry, trade unions and sustainability organisations and chaired by former UK Government permanent secretary Sir Philip Rycroft.

137 North Sea Transition Taskforce, Securing the future of the energy transition in the North Sea, 31 March 2025, p.12

138 Q39

139 Office for Budget Responsibility, Oil and gas revenues, (accessed 13 August 2025)

140 Office for Budget Responsibility, Economic and fiscal outlook - March 2025, 26 March 2025, p.88

141 Scottish Government (NRG0045)

142 Press & Journal, SNP energy secretary warns more firms may follow Harbour Energy job cuts in Aberdeen, 13 May 2025

143 British Chambers of Commerce (NRG0019)

144 Q32 [Louise Kingham]

145 Q32

146 Q38

147 BBC News, Oil and gas firm plans to cut 250 jobs in Aberdeen, 7 May 2025

148 Financial Times, Windfall tax weighs heavy on North Sea producers, 5 May 2024

149 Qq38–39

150 Q39

151 North Sea Transition Taskforce, Securing the future of the energy transition in the North Sea, 31 March 2025, p.5

152 Q32

153 Qq31–32

154 Energy Industries Council (NRG0004)

155 HM Treasury, Oil and gas price mechanism consultation, 5 March 2025, (accessed 23 July 2025)

156 Labour Party, Change: Labour Party Manifesto 2024, June 2024

157 Greenpeace (and others) v Advocate General [2025] CSOH 10

158 R (Finch on behalf of Weald Action Group) v Surrey County Council and others [2024] UKSC 20

159 Financial Times, Starmer wants contentious North Sea oil and gas fields to go ahead, 5 February 2025

160 Energy Voice, Reeves backs Jackdaw and Rosebank developments in North Sea, 24 March 2025

161 Department for Energy Security and Net Zero, Environmental Impact Assessment (EIA) – Assessing effects of downstream scope 3 emissions on climate, 19 June 2025

162 Qq31–32 [Louise Kingham]; Q33 [Hebe Trotter]; Q38 [Louise Kingham]; Q47 [Louise Kingham, Hebe Trotter]; Q49 [Hebe Trotter]

163 Q36 [Louise Kingham, Hebe Trotter]

164 Q36 [Louise Kingham, Hebe Trotter]

165 Department for Energy Security and Net Zero, Environmental Impact Assessment (EIA) - Assessing effects of downstream scope 3 emissions on climate, 19 June 2025

166 Department for Energy Security and Net Zero, Environmental Impact Assessment (EIA) - Assessing effects of downstream scope 3 emissions on climate, 19 June 2025, p.13

167 Financial Times, UK to consider economy and carbon mitigation when assessing oil and gas projects, 19 June 2025

168 BBC News, New emissions guidance for oil and gas projects, 19 June 2025; Financial Times, UK to consider economy and carbon mitigation when assessing oil and gas projects, 19 June 2025

169 Q250 [Michael Shanks]

170 Q250 [Michael Shanks]

171 Department for Energy Security and Net Zero, Building the North Sea’s Energy Future, March 2025, p.59

172 Q232 [Michael Shanks]

173 Q232

174 Q233

175 Q12 [Emma Pinchbeck, Richard Hardy, Ameena Camps]; Q22 [Fraser Stewart]; Q60, Q69 [Russell Borthwick]; Q62 [Neil Gordon]; Q66 [Becca Groundwater]; Q70 [Jenny Stanning]; Q182 [Kenneth MacInnes]; Energy Industries Council (NRG0004); Uplift (NRG0011); Scottish Renewables (NRG0037); Energy UK (NRG0039)

176 Department for Business and Trade, The UK’s Modern Industrial Strategy 2025, 23 June 2025

177 Q12

178 Q69 [Russell Borthwick]

179 Q12

180 Department for Business and Trade, Industrial Strategy: Clean Energy Industries Sector Plan, 23 June 2025, p.10

181 Q253

182 Q73 [Derek Thomson], Q75 [Derek Thomson]

183 Q79

184 Q79

185 Letters from the Chair to Derek Thomson, Scotland Regional Secretary at Unite the Union following up from 19 March session, dated 16 May 2025 and 16 April 2025, 3 September 2025; Letter from the Chair to Sharon Graham, General Secretary at Unite the Union regarding the energy transition plan, dated 3 June 2025, 3 September 2025

186 Q24 [Hannah Corbett]; Q25 [Paul de Leeuw]; Centre for Energy Policy, University of Strathclyde (NRG0047); RWE (NRG0018); Prospect (NRG0014)

187 Q25 [Hannah Corbett]; SSE plc (NRG0043)

188 SSE plc (NRG0043)

189 Q10 [Richard Hardy]; Qq77–78 [Ian Perth]; Uplift (NRG0011); Trades Union Congress (TUC) (NRG0029); Aberdeen & Grampian Chamber of Commerce (NRG0030); SSE plc (NRG0043)

190 Qq24–25 [Paul de Leeuw]; Q75 [Derek Thomson, Ian Perth, Robert Deavy]; Q231 [Michael Shanks]

191 Climate Change Committee, Seventh Carbon Budget, February 2025, p.328

192 Q9 [Richard Hardy]; Q22 [Fraser Stewart]

193 Q9 [Richard Hardy]; Q22 [Fraser Stewart]

194 Prospect (NRG0014); Decom Mission (NRG0028)

195 Q4 [Emma Pinchbeck]; Q9, Q14, Q17 [Richard Hardy]; Q62 [Neil Gordon]; Q71 [Jenny Stanning]; Q85 [Robert Deavy]; Q220 [Gavin Templeton]; Decom Mission (NRG0028)

196 Q9

197 Q85

198 Q78 [Ian Perth, Derek Thomson]; Energy Industries Council (NRG0004); Uplift (NRG0011); Ocean Winds (NRG0015); British Chambers of Commerce (NRG0019); Scottish Renewables (NRG0037)

199 Q78 [Ian Perth]

200 Q78

201 Uplift (NRG0011); Trades Union Congress (TUC) (NRG0029); Aberdeen & Grampian Chamber of Commerce (NRG0030); Offshore Energies UK (NRG0038)

202 Q59 [Jenny Stanning]; Q72 [Neil Gordon]; Q225, Q228, Q234 [Michael Shanks]; Port of Aberdeen (NRG0007); Uplift (NRG0011); Trades Union Congress (TUC) (NRG0029); Scottish Government (NRG0045)

203 Q195 [Jim Brown]; Uplift (NRG0011); Trades Union Congress (TUC) (NRG0029); Aberdeen & Grampian Chamber of Commerce (NRG0030); Offshore Energies UK (NRG0038)

204 Scottish Government (NRG0045)

205 Uplift (NRG0011)

206 Trades Union Congress (TUC) (NRG0029)

207 Offshore Energies UK (NRG0038)

208 Q12

209 Q252

210 Department for Energy Security and Net Zero, Tailored support for Aberdeen oil and gas workers, 23 July 2025

211 Department for Energy Security and Net Zero, Support for workers to benefit from thousands of clean power jobs, 22 January 2025

212 Q69 [Jenny Stanning]; Flotation Energy Ltd (NRG0009); Scottish Government (NRG0045); SSE plc (NRG0043); Offshore Energies UK (NRG0038); Scottish Renewables (NRG0037)

213 Q69 [Jenny Stanning]

214 Q25 [Fraser Stewart]

215 Q198 [Kenneth MacInnes]; Prospect (NRG0014); Scottish Renewables (NRG0037); Uplift (NRG0011)

216 Q25 [Fraser Stewart]; Q179 [Jim Brown, Neil Cowie]; Q185 [Kenneth MacInnes]; Energy UK (NRG0039); Friends of the Earth Scotland (NRG0020); Uplift (NRG0011); South of Scotland Enterprise (NRG0049)

217 Energy UK (NRG0039)

218 Ocean Winds (NRG0015)

219 Offshore Energies UK (NRG0038)

220 Q179 [Jim Brown]

221 Q185 [Jim Brown]

222 Ocean Winds (NRG0015)

223 Scottish Renewables (NRG0037)

224 Q178 [Neil Cowie]; Q208 [Doug Duguid]; Energy UK (NRG0039); Trades Union Congress (TUC) (NRG0029); Prospect (NRG0014); Engineering Construction Industry Training Board (NRG0022);

225 Q85 [Ian Perth, Robert Deavy]; Q178 [Jim Brown]; Qq218–219 [Doug Duguid]; Scottish Trades Union Congress (NRG0026); Engineering Construction Industry Training Board (NRG0022)

226 Q25 [Paul de Leeuw]

227 Comhairle nan Eilean Siar (Local Authority for Western Isles of Scotland) (NRG0002); Ocean Winds (NRG0015); Engineering Construction Industry Training Board (NRG0022); ORE Catapult (NRG0040); International Energy Agency, World Energy Employment 2023, November 2023, p.49

228 Q25 [Paul de Leeuw]

229 Q15 [Emma Pinchbeck]; Q83 [Ian Perth]; Q176 [Kenneth MacInnes]; Q183 [Jim Brown]; Q195 [Jim Brown]

230 Q15

231 Q15 [Emma Pinchbeck]

232 Q18

233 Q254

234 Q68 [Russell Borthwick, Jenny Stanning]; Q69 [Neil Gordon]; Q183 [Jim Brown], Qq194–195 [Jim Brown]; OPITO (NRG0006); Scottish Renewables (NRG0037); South of Scotland Enterprise (NRG0049)

235 OPITO (NRG0006)

236 SSE plc (NRG0043)

237 Q198 [Jim Brown]

238 Centre for Energy Policy, University of Strathclyde (NRG0047)

239 Q68 [Russell Borthwick, Jenny Stanning]; Q69 [Neil Gordon]; Q183 [Jim Brown], Qq194–195 [Jim Brown]

240 Q183 [Jim Brown], Q194 [Jim Brown]

241 Q177

242 Q176 [Kenneth MacInnes]; Q187 [Jim Brown]

243 STV News, All oil refining in Scotland ends as Grangemouth operations cease, 29 April 2025

244 BBC News, Grangemouth: 100 years in the oil industry, 22 November 2023

245 BBC News, Grangemouth oil refinery could cease operations by 2025, 22 November 2023

246 Q108 [Iain Hardie]

247 Note of visit to Rosyth, Grangemouth, Aberdeenshire, and Inverness – November 2024

248 Q115

249 INEOS, “Business as usual” for INEOS businesses at Grangemouth, 12 September 2024, (accessed 16 June 2025)

250 Scottish Parliament, written question S6W-31864, 10 December 2024

251 Scottish Government, Securing a future for Grangemouth, 18 February 2025

252 The National Wealth Fund is publicly owned, backed by the Treasury, and invests alongside the private sector in projects across the UK.

253 BBC News, PM announced £200 Grangemouth site support fund, 28 February 2025; Financial Times, UK pledges £200mn investment for Scotland’s Grangemouth refinery, 23 February 2025; HC Deb, 26 February 2025, col 776

254 Department for Energy Security and Net Zero, Plans for future of Grangemouth, 19 March 2025

255 Oral evidence taken on 25 June 2025, Q43 [Secretary of State for Scotland Ian Murray MP]

256 Q268 [Michael Shanks]

257 STV News, Ian Murray ‘confident’ jobs will return to Grangemouth, 9 March 2025

258 Q94 [Derek Thomson]

259 Q108 [Iain Hardie]

260 Q132 [Iain Hardie]

261 Q258 [Michael Shanks]

262 Q117 [Iain Hardie]

263 Q117 [Iain Hardie]

264 Q118 Colin Pritchard, Q120 Colin Pritchard

265 PwC, Economic Contribution of the Grangemouth Refinery, August 2024, p.4

266 Q73 [Derek Thomson]; Q90 [Robert Deavy]

267 Q97 [Robert Deavy]

268 Q90 [Robert Deavy]

269 Q93 [Robert Deavy]

270 Q93 [Derek Thomson]

271 Qq98–99 [Derek Thomson]

272 Q165 [Anu Bhambi]; Q190 [Kenneth MacInnes]

273 Scottish Development International, Project Willow, 19 March 2025, p.2, p.24, p.29

274 STV, Ian Murray ‘confident’ jobs will return to Grangemouth, 7 March 2025

275 Friends of the Earth Scotland (NRG0020); Q17 [Richard Hardy]; Q73 [Derek Thomson]; Q104 [Ian Perth]

276 Just Transition Commission, Letter to the Acting Cabinet Secretary for Net Zero and Energy, 6 March 2025

277 Q73 [Derek Thomson]; Q85 [Derek Thomson]; Q17 [Richard Hardy]

278 Q17

279 Q73 [Derek Thomson]

280 Friends of the Earth Scotland (NRG0020)

281 Q260 [Michael Shanks]

282 Q260 [Michael Shanks]

283 Q266 [Michael Shanks]; Department for Energy Security and Net Zero, Grangemouth workers receive “training guarantee”, 21 May 2025

284 Q17 [Richard Hardy]; Q94 [Derek Thomson]

285 Just Transition Commission, Letter to the Acting Cabinet Secretary for Net Zero and Energy, 6 March 2025

286 Q181 [Iain Hardie]

287 Q131

288 Q19 [Emma Pinchbeck]; Q25 [Fraser Stewart]; Q65 [Jenny Stanning]; Q71 [Russell Borthwick]; Qq218–219 [Doug Duguid]; Q220 [Gavin Templeton]; Prospect (NRG0014); OFTEC and UKIFDA (NRG0016); Friends of the Earth Scotland (NRG0020)

289 Q203

290 Q17

291 Q25

292 Q128 [Anu Bhambi]

293 Scottish Development International, Project Willow, 19 March 2025

294 Department for Energy Security and Net Zero, Grangemouth workers receive ‘training guarantee’, 21 May 2025

295 Q268 [Michael Shanks]

296 Q133 [Iain Hardie]

297 Q268

298 Accurate figure as of 2 July 2025.

299 Q270 [Michael Shanks]

300 Scottish Parliament, Economy and Fair Work Committee, Grangemouth’s Industrial Future, 11 June 2025, C12

301 The National Wealth Fund is a publicly owned investment fund, backed by HM Treasury. It is designed to finance infrastructure projects and encourage private sector investment.

302 BBC News, PM announced £200m Grangemouth site support fund, 28 February 2025

303 Q257; Scottish Parliament, Economy and Fair Work Committee, Grangemouth’s Industrial Future, 21 May 2025, C3

304 Scottish Parliament, Economy and Fair Work Committee, Grangemouth’s Industrial Future, 21 May 2025, C16

305 Oral evidence taken by the Scottish Affairs Committee on 25 June 2025, Q45 [Ian Murray]

306 National Wealth Fund, Investment principles (accessed 16 July 2025)

307 Q94 [Derek Thomson]; Q131 [Iain Hardie]; Q155 [Anu Bhambi]; Q157 [Colin Pritchard]

308 Q155

309 Q94 [Derek Thomson]

310 Q130 [Anu Bhambi]; Qq157–158 [Anu Bhambi]; Q169 [Anu Bhambi]

311 Q203

312 Q131 [Iain Hardie]

313 Q133 [Iain Hardie]

314 Q154 [Iain Hardie]

315 Qq107–108 [Iain Hardie]

316 Scottish Development International, Project Willow, 19 March 2025

317 Q268 [Michael Shanks]