The government has confirmed the North Sea Transition Authority (NSTA) will invite applications for new oil and gas licences on an annual basis.
Each annual licencing round will only take place if key tests are met that support the transition to net zero. The first test is that the UK must be projected to import more oil and gas from other countries than it produces at home.
The second is that the carbon emissions associated with the production of UK gas are lower than the equivalent emissions from imported liquefied natural gas.
If both these tests are met, the NSTA will be required to invite applications for new licences annually.
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The government said that the new legislation, set to be announced in the King’s Speech, will help to boost jobs, grow the economy and reduce the country’s reliance on imports.
Prime minister Rishi Sunak said: “I am proud that the UK is a world leader in reducing emissions, and of our new plan to transition to net zero without adding undue burdens on households and securing the country’s long-term interest.
“Domestic energy will play a crucial role in the transition to net zero, supporting jobs and economic growth, while also protecting us from the volatility of international markets and diversifying our energy sources,” he added.
“The clarity and certainty that our new legislation will provide will help get the country on the right path for the future.”
