PARLIAMENTARY WRITTEN QUESTION
Fossil Fuels: Finance (4 June 2021)

To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to the International Energy Agency’s report entitled Net Zero by 2050: A Roadmap for the Global Energy Sector, published in May 2021, what steps his Department is taking to cease investment in new fossil fuel projects.

Asked by:
Ed Davey (Liberal Democrat)

As of 31 March 2021, the UK Government no longer provides any new direct financial or promotional support for the fossil fuel energy sector overseas, other than in limited circumstances, and is aligning its support to enable clean energy exports. The UK Government does not subsidise fossil fuel projects domestically.

As we move towards net-zero, oil and gas will play a smaller role in meeting UK energy demand. However, it will continue to play an important role. The independent Climate Change Committee has recognised the ongoing demand for oil and natural gas, including it in all scenarios it proposed for how the UK meets its target for achieving net zero emissions by 2050.

Even with continued licensing, the UK is expected to remain a net importer of oil and gas in the coming decades. This is because UK Continental Shelf (UKCS) production is declining rapidly as the basin matures, and fields being brought online at this stage in the UKCS’ maturity are generally small in comparison to elsewhere in the world. An orderly transition, underpinned by oil and gas, is therefore crucial to maintaining our energy security of supply.

Our review into the future of offshore oil and gas licensing concluded that a formal climate compatibility checkpoint, building on current practice, should be established. This will help ensure that any future licences are only awarded on the basis that they are aligned with the government’s broad climate change ambitions, including the UK’s target of reaching net zero by 2050. This checkpoint will be designed by the end of 2021 and will allow for an orderly transition, underpinned by ongoing production of oil and gas as long as we still require it domestically, while the sector increasingly bears down on its production emissions, and pivots to support the energy transition.

Answered by:
Anne-Marie Trevelyan (Conservative)
9 June 2021