More than 110 companies have signed a letter calling on the government to end the Energy Profits Levy (EPL) on North Sea oil and gas firms.
At the same time, energy secretary Ed Miliband has given a speech at Energy UK conference 2025 signalling his desire to move away from fossil fuel production.
Removing the Energy Profits Levy (EPL) could slow down the transition from fossil fuels by enhancing the investment attractiveness of new oil and gas projects. Also known as the oil and gas windfall tax, the EPL is a temporary UK tax on enormous profits of oil and gas companies operating in the North Sea. It was introduced in part to raise money to help fund support for households struggling with high energy bills by taxing the high profits of oil and gas companies operating in the UK.
The North Sea is a contentious issue as the UK attempts to reach net zero and reduce its reliance on the burning of fossil fuels to power the electricity network.
Offshore Energies UK (OEUK) posted the letter on its website stating it had been signed by 110 signees, whose names have not been disclosed. Offshore Energies has warned the government that “without a permanent replacement for the temporary Energy Profits Levy, the nation risks losing thousands more jobs, billions in investment and critical supply chain capability essential for the UK’s energy security and transition.”
OEUK supply chain champion Steve Nicol has led the call to government urging them to work with industry and “implement a competitive, permanent tax regime from 2026, as outlined in the Treasury’s 2025 oil and gas price mechanism consultation.”
Many companies in the sector operate “multi-revenue” models, progressing oil and gas and renewables in tandem. Stable cash flow from oil and gas underpins investment in emerging opportunities such as floating offshore wind and carbon capture and storage, which OEUK has warned could collapse without the abolition of the levy.
As part of the government’s election manifesto it promised to ban exploratory licenses in the North Sea.
Miliband doubled down on these claims in June when the Treasury launched its paper on a long-term successor to the windfall tax currently afforded to industry operating in the region.
As part of its current proposals for the North Sea, the government has stated it is committed to working with communities and organisations that serve the North Sea to develop a transition plan. It is doing this in conjunction with the North Sea Transition Authority, which currently regulates licence issuing, and aims to develop proposals to offer thousands of jobs to those that will lose work when oil and gas exploration ceases.
Miliband has let his feelings be known on continuing this strand of ending fossil fuel production in the UK. Speaking at Energy UK conference 2025 on 14 October, he said: “My case today is this. First, our exposure to fossil fuel markets remains the Achilles heel of our energy system, keeping bills high and giving us no long-term certainty over price.
“Second, that we face further challenges of historic under-investment in our energy system and growing electricity demand. The choice for the future is therefore what kind of energy system we want to build, not whether we want to build it at all.
“Third, building clean energy is the right choice for the country because, despite the challenges, it is the only route to a system that can reliably bring down bills for good, and give us clean energy abundance.
“Fourth, as we build this new infrastructure, the government is determined to work with you to bring the benefits to families and businesses as quickly as possible.”
Miliband also commented on how recent energy price shocks, prominently caused by Russia’s invasion of Ukraine, have affected the UK’s growth and economic stability.
“Going back further, this has been a long-standing weakness at the heart of the British economy and society, with half of our recessions since 1970 caused by fossil fuel shocks,” he said.
“And looking forward it remains a massive risk, particularly at a time of global instability.
“According to the Office for Budget Responsibility, if gas price spikes occurred even once every decade, it could cost the UK between 2 to3% of GDP annually.
“So anyone who tells you we can solve the issues of energy security and affordability without addressing our reliance on fossil fuels seems to me to be ignoring the evidence before our eyes and this country’s painful recent experience.”
Further to these claims, Miliband also discussed the financial costs associated with continuing to use fossil fuels.
“To listen to some people talk, you would think there was a free pass to just carry on using unlimited gas from existing stations for the next few decades, but that is simply not the case,” he stated.
“Of course, we could decide to stop building renewables and just rely on a whole new fleet of gas-fired power stations, but we need to be candid that this would involve the costs of building not just operating these plants.”
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