UK’s new guidance sheds light on North Sea oil & gas game as application window opens

In the wake of a Supreme Court ruling, marking the first inclusion in Britain’s history of greenhouse gas (GHG) emissions from the combustion of oil and gas in environmental impact assessments (EIAs) for hydrocarbon extraction projects, the United Kingdom (UK) set out to create a new environmental guidance, which has now been revealed. This enables offshore developers to submit their applications for consent to develop already-licensed oil and gas fields in the North Sea.

Following the Supreme Court’s ruling in the Finch case last year, concerning the inclusion of Scope 3 emissions in development project environmental impact assessments, the UK government embarked on a consultation on new environmental guidance for oil and gas firms, which was scheduled to be concluded by Spring 2025. 

The government explains that it acted decisively to respond to the independent Supreme Court, which ruled before this government took office that the global environmental effects of burning oil and gas are an inevitable consequence of extraction projects. As a result, North Sea operators for the first time are required to consider the impact of burning the extracted oil and gas in environmental impact assessments. 

Britain’s new guidance, published on June 19, regarding the assessment of the effects of downstream Scope 3 emissions on climate, which is said to be supplementary to existing guidance on environmental impact assessments for oil and gas extraction projects, is intended to assist developers in understanding the EIA process.

The UK’s Department for Energy Security and Net Zero is adamant that this guidance is not intended to provide a definitive statement of the law or to constitute legal advice. With this in mind, developers remain responsible for ensuring their environmental statements are prepared by competent experts and should seek technical and legal advice as necessary. 

The new guidance, which Britain claims will ensure the full effects of fossil fuel extraction on the environment are recognized in consenting decisions, sets out how environmental impacts of oil and gas should be assessed, providing a way forward for the industry, enabling offshore oil and gas developers to benefit from greater clarity and stability.

Moreover, offshore developers will now be able to hand in their applications for consent to extract oil and gas in already-licensed fields, a process which has been on pause since the Finch Supreme Court judgment. When deciding on an application, the Energy Secretary will consider the significance of a project’s environmental impact, taking into account and balancing relevant factors on a case-by-case basis, such as the potential economic impact and other implications.

According to the government, there is no change to the legislation, as the process remains the same, with environmental statements being subject to public notice requirements for 30 days. This means the government does not anticipate taking any decisions until Autumn at the earliest, on applications received following the new guidance.

Michael Shanks, UK’s Energy Minister, highlighted: “This new guidance offers clarity on the way forward for the North Sea oil and gas industry, following last year’s Supreme Court ruling. It marks a step forward in ensuring the full implications of oil and gas extraction are considered for potential projects and that we ensure a managed, prosperous, and orderly transition to the North Sea’s clean energy future, in line with the science.  

“We are working with industry, trade unions, local communities and environmental groups to ensure the North Sea and its workers are at the heart of Britain’s clean energy future for decades to come – supporting well-paid, skilled jobs, driving growth and boosting our energy security.”

This publication concerning Britain’s oil and gas sector comes at a time when the government continues its work with the industry to build a clean energy future for the North Sea, as illustrated in last week’s Spending Review, which confirmed £9.4 billion ($12.8 billion) for carbon capture and storage projects – marking a major step forward in the mission to make the UK a clean energy superpower. 

Taking into account the government’s plan to put the North Sea at the heart of Britain’s clean energy future, the new guidance is aimed at applications for projects in North Sea oil and gas fields that are already licensed and follows the government’s decision to provide around £200 million (more than $268.5 million) to progress the Acorn project in Aberdeenshire, subject to business case, as part of the the Spending Review.

Later this year, the government is expected to respond to its consultation on how to support a clean energy transition for the North Sea and its workers. It will also provide insights into the commitment not to issue new licenses for oil and gas exploration, as it claims that support to help oil and gas workers maximize the opportunities of the clean energy transition is already underway.

After the government confirmed Aberdeen as one of four key growth regions for clean energy – alongside Cheshire, Lincolnshire and Pembrokeshire – and launched pilots to help workers in these areas access jobs in new clean energy industries, oil and gas workers are expected to also get help to move into these sectors, thanks to a new energy ‘skills passport.’

Led by Offshore Energies UK and RenewableUK, and backed by UK and Scottish governments, this tool is being presented as a way to support workers into careers in offshore wind initially, before being expanded to other renewable energy roles later this year.    

The Finch ruling has already left its mark on the British offshore oil and gas scene, as illustrated by a judicial review, launched by climate campaigners, which prompted the Court of Session in Edinburgh to rule in January 2025 that the previous government’s decision to approve Equinor’s Rosebank and Shell’s Jackdaw oil fields was unlawful; thus, the decision was overturned.

Therefore, the court accepted Uplift’s argument that the government failed to consider the emissions that would be caused by burning the oil and gas produced by these fields when it approved them.

These climate activists underline that the burning of almost 500 million barrels of oil and gas, which Rosebank contains, will produce more CO2 than the annual emissions of the world’s 28 lowest-income countries combined.

The fiscal and regulatory policy concerns surrounding the UK oil and gas ecosystem also have the potential to postpone the first oil from the Buchan project, expected in late 2027, after being delayed for a year from the original timeline, which anticipated its start-up in late 2026.