UK to consider economy and carbon mitigation when assessing oil and gas projects

Keep knowledgeable with free updatesSimply signal as much as the Local weather change myFT Digest — delivered on to your inbox.Ministers will contemplate the financial advantages of North Sea oil and fuel tasks together with carbon “removing” actions when deciding whether or not to grant consents, underneath steering designed to keep away from courts overturning approvals.The recent steering issued on Thursday comes after a landmark court docket judgment final 12 months that faulted UK authorities for failing to weigh the local weather results of burning fossil fuels when issuing improvement consents within the North Sea.The vitality secretary would assess such results, often called downstream emissions, by contemplating the federal government’s “total vitality and environmental aims, and the potential financial and different benefits of the venture”, in accordance with the steering.The doc added that proposals by firms to minimize their carbon affect akin to by investing in carbon dioxide “removing” tasks would even be thought-about when the federal government guidelines on improvement consents. The language might be useful to 2 huge oil and gasfields being developed by Shell and Equinor whose consents have been quashed final 12 months as a result of downstream emissions had not been thought-about.The choice rested on a take a look at created in a Supreme Courtroom case often called Finch, which stated authorities wanted to keep in mind carbon dioxide emitted when customers burn the oil and fuel produced.Shell and Equinor at the moment are anticipated to reapply for consents for his or her respective Jackdaw and Rosebank tasks within the wake of the recent steering, which units out how oil and fuel firms ought to write environmental affect assessments when submitting purposes.The tasks arrange Sir Keir Starmer’s authorities for a conflict with local weather campaigners, and threaten to jeopardise his tightrope method to North Sea oil and fuel.  The prime minister desires to maneuver away from fossil fuels and plans to not difficulty licences for brand new oil and fuel exploration within the North Sea, however has stated his authorities wouldn’t intrude with current licences. Jackdaw and Rosebank have been each awarded licences and consents earlier than Labour was elected in July 2024, however some campaigners consider the federal government ought to deny any reapplication for consent given the tasks’ carbon emissions. Starmer and chancellor Rachel Reeves have each signalled assist for the tasks. Reeves advised the Solar on Sunday newspaper in March: “We stated in our manifesto that they might go forward, that we’d honour current licences, and we’re dedicated to doing that, and go forward they may.”Rosebank is the UK’s largest undeveloped oil reserve and is believed to include 500mn barrels of oil. Ed Miliband, vitality secretary, in 2023 — when Labour was in opposition — described the licence issued to Rosebank as “a colossal waste of taxpayer cash and local weather vandalism”. Mel Evans, head of local weather at Greenpeace UK, stated the tasks ought to nonetheless be blocked even underneath the brand new steering, although she warned that factoring in carbon removing measures risked making a “harmful loophole”.“Since Rosebank and different drilling websites will pump out a number of carbon whereas offering little profit to the economic system and no assist to invoice payers, they need to fail the factors ministers have simply set out,” she stated.Evans added: “Ed Miliband was proper to say approving Rosebank could be local weather vandalism — he ought to stay true to his phrase.”Rosebank stated it was reviewing the steering and was dedicated to advancing the venture. Shell stated it had spent £800mn creating Jackdaw up to now and it was additionally dedicated to seeing it via. The venture “helps the federal government’s progress agenda”, it added. Underneath the brand new steering, builders might want to set out how the emissions from burning their product would have an effect on world carbon budgets, together with the potential cumulative impact when thought-about alongside different developments.The steering doesn’t advocate particular measures to mitigate emissions however says the regulator’s present view is that “emissions removals at the moment seem like most applicable”.Carbon could be faraway from the environment by direct air seize or tree-planting. The steering didn’t specify which removing measures could be finest, saying solely they must be “excessive integrity”.The steering provides it’s “unlikely” that drillers might supply carbon discount credit they’ve purchased from others in mitigation for their very own emissions. Vitality minister Michael Shanks stated the steering would “guarantee a managed, affluent, and orderly transition to the North Sea’s clear vitality future, in keeping with the science”.Local weather CapitalWhere local weather change meets enterprise, markets and politics. Discover the FT’s protection right here.Are you interested by the FT’s environmental sustainability commitments? Discover out extra about our science-based targets right here