UK Budget 2025: North Sea Plan Allows Limited New Extraction Through ‘Transitional Energy Certificates’
The government has unveiled its North Sea Future Plan — a wide-ranging package that keeps the promise of no new oil and gas exploration licences, but introduces a new mechanism that will still allow additional extraction from existing areas of the basin.
At the centre of the announcement is the creation of Transitional Energy Certificates, a tool designed to permit limited new production where it connects directly to existing fields and infrastructure and does not involve any new exploration activity. Ministers say this approach keeps the UK aligned with climate science while ensuring existing fields remain economically viable through the end of their natural lifespan.
The move represents a shift from the government’s earlier, stricter framing of “no new” production. While exploration remains banned, the certificates create space for incremental supply from “near-field” areas — effectively a managed extension of current assets. Officials describe this as necessary to support a “smooth, orderly and prosperous transition” as North Sea output continues its long-term decline.
Beyond the headline measure, the plan sets out three strands intended to secure the basin’s future: growing clean-energy industries such as offshore wind, hydrogen and CCS; managing existing oil and gas fields with a revised regulatory framework; and delivering a new National Jobs Service to help workers move into sectors such as renewables, defence and advanced manufacturing.
Energy Secretary Ed Miliband said the plan puts workers and communities “at the heart of Britain’s clean energy future” and ensures the North Sea remains an energy powerhouse for decades to come. The government argues that the approach provides long-term clarity for investors while giving the regulator new powers to balance economic value, net-zero goals and the needs of workers and supply chains.
The North Sea basin is already in steep natural decline — production has fallen by around 75% since 1999, with over 70,000 jobs lost in the last decade. By allowing controlled extensions of existing projects while boosting investment in clean energy and skills retraining, the government hopes to stabilise the region through the transition and position it at the centre of a new industrial strategy.
Whether Transitional Energy Certificates become a bridge or a loophole will now depend on how tightly they are applied — and how quickly the UK can scale the clean-energy industries expected to replace oil and gas in the decades ahead.