UK’s oil and gas sector risks missing 2030 climate targets, regulator warns

Pictured: The Shearwater platform operated in the North Sea by Shell. Image: Stuart Conway for Shell.

The North Sea Transition Authority (NSTA) this week opened a consultation on a forthcoming plan for the low-carbon transition for the sector.

It has concluded that the industry is on track to reduce emissions by 10% by 2025 and by 25% by 2027, against a 2018 baseline. However, measures already in train across the sector are unlikely to deliver a promise to halve emissions  between 2018 and 2030, by the NSTA’s calculations.

“Significant progress has been made, but there is more work to be done and the NSTA estimates that without further initiatives, the 2030 emissions reduction target agreed between government and industry as part of the North Sea transition deal may be missed,” the regulator said this week.

Its statement added that “bold measures” will be needed to deliver the 2030 climate target. “Progress is tough and will require investment, collaborative effort and detailed planning,” it goes on to note.

The NSTA is consulting on measures to reduce the sector’s operational emissions across four pillars – energy and material efficiency; switching fuel sources to electric or other low-carbon alternatives; cutting venting and flaring and managing asset inventory to phase out older, less efficient assets.

It bears noting that Scope 3 (indirect) emissions from the sector are not covered in the NSTA’s proposed plan. As the bulk of the sector’s total carbon footprint is generated from the end-use of its fuels, Greenpeace UK has stated that the proposed changes would only address “the mere tip of the iceberg”.

On flaring and venting, Chris Skidmore MP’s Net-Zero Review recommended the implementation of a ban in 2025. The Government declined to adopt this recommendation and stated that the original 2030 ban date would already be “challenging” to meet.

The NSTA is consulting on interim targets to reduce venting and flaring, creating a more detailed pathway. Already, flaring has been reduced by more than 40% since 2018.

Consultation responses are being accepted until 30 November.

Carbon capture progress

In other news from the North Sea’s fossil fuel sector, The Crown Estate has awarded a BP-led carbon capture and storage (CCS) project with an agreement for lease.

The Crown Estate has stated that the project, called ‘Endurance’, has the potential to be one of the largest of its kind in the world. It will enable CO2 to be stored in a reservoir in a rock deep under the ocean.

Carbon being stored in the reservoir would predominantly be captured from heavy industrial clusters in the North East. BP is notably leading the East Coast Cluster project to bring industrial hubs in Humberside and Teesside to net-zero by 2050. Other firms are participating through the Northern Endurance Partnership.

The Crown Estate, which leases plots of seabed, called the awarding of the lease agreement a “significant milestone” for growing the UK’s CCS capacity.

The CCC has stated that using some CCS is “ a necessity, not an option” if the UK is to deliver its 2050 net-zero target. The Government has, therefore, set a vision for the nation to have enough capacity to capture and store 20 to 30 MtCO2 by 2030. Earlier this year, 14 companies were awarded licences in the UK’s first CCS storage licencing round.

As well as the touted emissions benefits, the nascent sector has talked up its potential for job creation and contributing to the economy. The CCS Association believes that the sector could leverage £40bn in investment this decade with well-planned policy support.

But CCS remains controversial. There are concerns that fossil fuel majors may bet on CCS as an alternative to directly cutting their emissions and phasing down production of high-carbon fuels. This would not only risk the climate benefits, if technologies do not mature and expand as expected, but potentially increase the cost of the transition. Capturing a tonne of CO2e using man-made tech currently costs between $50 and $200. It is typically cheaper to instead replace fossil fuels with clean electricity.