Offshore companies call for windfall tax reform

THE Chancellor is being pressed to replace the so-called windfall tax on North Sea energy operators to halt decline and protect jobs in the North East.

- TOM KEIGHLEY

A group of senior industry figures, led by major gas infrastructure firm Kellas Midstream, is calling for early reform to the tax - formally the energy profits levy - that was temporarily introduced in 2022 following Russia’s invasion of Ukraine, which sent energy prices soaring and led to bumper profits.

The levy was increased last year to give a headline rate of 78%, and extended until 2029.

But industry leaders, including the Offshore Energies UK (OEUK) body, have repeatedly said the tax is deterring investment and causing a loss of jobs, which could threaten the UK’s ability to transition to green energy.

Kellas Midstream, which operates the major Central Area Transmission System (CATS) terminal that processes about 40% of the UK's gas, points to data it says shows the UK already imports more than 50% of the gas it requires, and will import 80% of its gas in the 2030s.