At the state opening of Parliament, the King confirmed that the government will make it illegal to grant new oil and gas licences in the North Sea, giving legal force to Labour’s manifesto pledge. The ban will be delivered through an Energy Independence Bill, which aims to “bake into law” the commitment not to explore new oil and gas fields in future.
Ministers argue that the legislation is central to Labour’s ambition to turn the UK into a “clean energy superpower” by 2030, with a power system predominantly based on renewables and nuclear. Existing North Sea fields will be allowed to run down over time, but the door will be closed to new standalone exploration projects.
Government doubles down despite criticism
The decision comes despite warnings from industry and political opponents that stopping new licences will deprive the UK of billions in future tax receipts and increase reliance on imported fossil fuels. Oil and gas producers already face a combined tax rate of up to 78% under the Energy Profits Levy, which the government has said will end in 2030 as part of a new fiscal regime for the basin.
Critics argue that demand for oil and gas will persist for decades and that importing supplies from abroad could increase global emissions as well as costs to consumers. Ministers counter that locking in the ban sends a powerful signal to investors about the UK’s long‑term direction and will help crowd in capital to offshore wind, carbon capture, hydrogen and other low‑carbon technologies.
In traditional oil and gas regions such as the north‑east of Scotland, the announcement has been met with a mix of anxiety and guarded optimism. Industry bodies have repeatedly warned that a combination of high taxes and an end to new licences risks accelerating decommissioning and driving investment to rival basins, with knock‑on effects for jobs in engineering, fabrication and the wider supply chain.
The government insists its North Sea Future Plan will manage existing fields “fairly and prosperously”, protect skilled workers and support them into new roles in offshore wind, carbon capture and hydrogen projects. It has also launched consultations on a successor regime to the windfall tax and on the long‑term shape of the basin to provide greater certainty for companies making investment decisions.
The permanent ban formalises a direction of travel that has been emerging over the past two years, with ministers repeatedly restating opposition to fresh North Sea exploration. In 2024 and 2025, legal challenges in Scottish courts over projects such as Jackdaw and Rosebank, alongside controversy over an earlier reported moratorium on new drilling approvals, highlighted the growing constraints on expanding the basin.
Under existing rules, developers can still seek to boost production within or adjacent to currently licensed areas to maintain economic viability, but the scope for opening new fields will now disappear once the Bill is enacted. This places even greater emphasis on making best use of existing infrastructure as the UK seeks to balance energy security with its net zero commitments.
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Clean energy ambitions and net zero
The Energy Independence Bill is also expected to contain measures to accelerate renewables, nuclear and grid infrastructure as the UK works towards its 2050 net zero target. Officials see the North Sea as a critical platform for offshore wind expansion, carbon capture and storage, and low‑carbon hydrogen, repurposing skills and assets developed during decades of oil and gas production.
Supporters of the ban say it reinforces the UK’s international climate leadership by making it one of the first major oil‑producing countries to draw a line under new exploration. Opponents insist that without a carefully managed transition, the policy could amount to “managed decline” rather than “managed prosperity” for communities that have long depended on the sector.
