Energy Profits Levy to remain for next five years

The UK Government has announced that the Energy Profits Levy, which puts a marginal tax rate of 75% on North Sea oil and gas production, will remain in place for the next five years while oil and gas prices remain higher than historic norms – but this will fall back to 40% when prices consistently return to normal levels for a sustained period.

Responding, Andrew MacNish Porter, Policy Manager at Scottish Renewables, said:

By continuing to provide investment allowances to oil and gas extraction the Energy Profits Levy continues to undermine the UK’s reputation as a leader in renewable energy.

“Meanwhile, the windfall tax on renewable energy generators has no such investment allowance and is therefore tempering the enthusiasm of international investors looking to the UK Government to provide a stable policy environment that encourages investment in clean power.

“Countries around the world, such as the USA and across the EU, are benefiting from unprecedented levels of investment support that if not matched will mean that the economic and environmental benefits that clean energy investment can deliver will be realised abroad whilst the UK misses out.

“The UK needs to catch up and match these incentives to ensure our industry remains an internationally competitive destination for renewable energy investment.”

• More on the Energy Profits Levy is available from the UK Government.