Aberdeen at risk of losing global energy capital status, according to new report
Concerns include the windfall tax and the hostility surrounding new oil and gas
Last updated 29th Jan 2024
Nearly two-thirds of businesses believe that no political party is delivering the best policy for the energy transition.
That's one of a number of concerns found in Energy Transition 37, the latest report from the Aberdeen and Grampian Chamber of Commerce.
Less than one in five business have faith in the Tories delivering the best policies for the transition to renewables, whilst that figure drops to 7% when businesses were asked about the SNP's policies.
Investor confidence nearing a record low
A number of key concerns have been raised in the report, including business confidence in the UK Continental Shelf falling to its lowest point since the pandemic.
That compares to April last year, when confidence was close to reaching pre-pandemic levels.
But confidence in overseas markets remains high, with and operators surveyed confirming that discretionary capital is now being diverted away from the UK.
But what does it all mean?
In short, world class energy supply chain businesses with bases in the North-East of Scotland are finding export markets for their skills and technologies in other parts of the world.
The report shows that government policy, including taxation, has emerged as the biggest factor impacting future activity levels.
The Chairman of the Aberdeen & Grampian Chamber of Commerce, Russell Borthwick, said: "As has been warned for over a year now, we are risk of accelerating the decline of our oil and gas sector at a pace which jeopardises the skills and investment required to deliver the UK’s net zero plans.
"Government and industry share the same green aspirations, but there is a clear disconnect between policy makers and those who will fund and deliver our low carbon future, particularly over the role of oil and gas. This needs to be addressed as a matter of urgency."
His sentiment was echoed by Robert Aitken, Director at KPMG UK in Aberdeen, who said :"the latest survey shows that the north east’s energy industry is evolving and is working towards a future where greener activities start to outweigh more carbon intensive ones, but clearly more support is needed from all corners to maintain focus on the long-term objective of net-zero.
"Keeping both plates spinning in unison is critical to delivering energy security and creating the revenues and high-quality jobs that are desperately needed to grow our economy and to maintain the north east’s position as a global energy hub.
Not all doom and gloom
Mr Borthwick continued, saying: "It is pleasing to see that the energy transition is well and truly in action, with respondents projecting that 45% of their operations will be in new energy activities by 2030.
"The most popular areas of growth being in decommissioning, offshore & onshore wind, CCUS, hydrogen production/transportation and geothermal."