UK windfall tax can support green jobs for North Sea energy workers

Fossil fuel reserves in the North Sea are depleting at an accelerated pace, leading to inevitable job losses across the sector. A new report suggests that a permanent windfall tax on oil and gas producers could generate enough revenue to fund a transition towards green jobs and renewable energy projects. By redirecting this financial support, workers currently reliant on the fossil fuel industry could be retrained and employed in sustainable energy roles, ensuring a fairer economic shift for affected communities.

Research conducted by the campaign group Oil Change International estimates that approximately £1.9 billion per year is required to facilitate this “just transition”. The allocation includes £1.1 billion to develop wind energy infrastructure and create green jobs, £440 million to upgrade ports for offshore wind turbine construction and maintenance, and £355 million for a training fund to support retraining oil and gas workers.

The energy profits levy, introduced after global oil and gas prices surged due to geopolitical tensions, has already raised billions. Making this levy permanent could generate at least £2 billion annually, more than enough to cover the costs required for a sustainable energy transition. Campaigners also advocate for closing tax loopholes, such as the “carried interest” provision, which allows private equity managers to pay reduced tax rates, potentially raising an additional £490 million per year in government revenue.

Concerns have been raised about the current approach towards subsidies, with fossil fuel producers enjoying £17.5 billion annually in government assistance. These subsidies include tax breaks for extraction activities and decommissioning oilfields, valued at £2.7 billion per year. Additionally, nearly £900 million, currently allocated to carbon capture and storage projects, is classified as support for the fossil fuel industry rather than investment in genuine renewable initiatives.

The dwindling North Sea reserves mean declining fossil fuel-related employment is inevitable, as acknowledged by experts and campaigners alike. With the Labour Party pledging to end the issuance of new licences for North Sea projects, the debate over balancing economic needs and environmental imperatives has intensified. Critics argue that proactive investment in renewable energy sectors would not only safeguard jobs but also reduce reliance on a fading fossil fuel market.

Advocates emphasise the importance of purposeful government intervention in delivering a fair transition. They stress that leaving the process solely to market forces risks exacerbating challenges for communities facing rising living costs and job insecurity. By implementing key reforms and redirecting subsidies, the UK has the potential to emerge as a leader in clean energy while providing secure and well-paid opportunities for its workforce.