UK Windfall Tax Rise on Fossil Fuels for Renewables to Drop Oil, Gas Revenues

The UK’s decision to increase the windfall tax on oil and gas producers to 38% from 35% on 1 November to fund domestic renewable expansion, will significantly drop revenues and impact future investment, North Sea drillers said, cited by XM.

• The headline rate of tax on oil and gas activities will rise to 78% - around the highest in the world.
• The tax is estimated to raise around £1.2 bn/yr, Wood Mackenzie said.
• The mechanism will “ensure oil and gas companies contribute more towards our clean energy transition," a treasury spokesperson said.
• The UK government recently raised its latest AR6 renewable auction by £500mn to £1.5bn - a record. Most of the funding is for offshore wind farms.