A flagship report published by the representative body for the UK offshore oil and gas industry finds that the UK’s carbon emissions fell by an estimated 10.3% this year, as the economy contracted by 11.3%.
OGUK says the figures confirm the scale of the challenge in securing a green recovery, urging governments to act now to ensure the UK builds a homegrown transition towards a clean energy future.
It comes as the report finds 85% of OGUK members throughout the supply chain expect to increase their diversification into non-oil and gas activities during the next 12-24 months due to the current market conditions. Underlining the critical capabilities within the sector to accelerate government ambitions to reach net zero carbon emissions by 2050 in the UK and 2045 in Scotland.
OGUK’s Economic Report 2020 explores the shifting economic and energy environment in this, a year of rapid change. From the impact of COVID-19 and the commercial consequences of the pandemic, to the downturn in global energy demand, this report explores the industry’s crucial but evolving future role in the energy mix.
Despite the challenges the industry faces, the report also reinforces the sector’s long-term commitments to the energy transition, with the final part of the report setting out how OGUK have further developed Roadmap 2035 into their vision for the North Sea Transition Deal.
The report shows that:
- Global energy demand is expected to decrease by 5% in 2020, the UK reported 12% reduction in total energy demand in the first three quarters of the year.
- UK carbon emissions have fallen by an estimated 10.3% so far this year, while global emissions have fallen by 5.5%.
- At the start of 2020, there were more than GBP 35 billion of capital investment opportunities identified within company plans over the next 10 years. Progression of these opportunities is important in the ability to continue to meet the UK’s oil and gas demand in the future.
In a world where sustainability is a priority, today’s report highlights that with a clear and supported pathway for the changing industry the UK can build a homegrown transition towards a lower-carbon future.
OGUK’s Chief Executive Deirdre Michie says, “Today’s report highlights that we have a unique opportunity for the transition towards a lower-carbon future to be homegrown in this country and potentially exported across the world. 2020 has been an incredibly challenging year for the oil and gas supply chain as it faced both the well-documented impact of COVID-19 and the subsequent decline in demand for energy. Utilising the expert technical knowledge that exists within the substantial UK oil and gas supply chain is fundamental if we are to evolve toward a lower-carbon future.”
“Our Economic Report 2020 shows that oil and gas produced in the UK will continue to support energy security in the decades to come, but as part of a changing and cleaner energy mix. With the right support this industry can truly come of age and continue to make a positive contribution in this new energy landscape. However, our report makes clear that reaching this positive future will require working in the here and now to protect the jobs and companies needed to bring our climate ambitions to life. OGUK continue to work closely with the UK Government on proposals for a transformational North Sea Transition Deal, which will help unlock the full contribution the industry can make to achieving net-zero and the wider economic benefits,” Michie concludes.