Energy Security Bill factsheet: Offshore oil and gas decommissioning cost recovery
Updated 1 September 2023
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1. Why are we legislating?
BEIS provides regulatory functions for offshore oil and gas decommissioning. It is currently unable to recover the full costs of undertaking these functions from industry, and is instead met through central budgets, leaving the taxpayer liable for any shortfall. Due to the increasing scale of offshore decommissioning activities and the associated fees and the introduction of BEIS CCUS regulatory regime the current cost recovery mechanism is no longer fit for purpose. This measure will make amendments to future proof the cost recovery mechanism in line with the polluter pays principle of environmental law.
Maximising our cost recovery will enable us to ensure a sufficiently resourced regulator, ensuring we do not cause the industry to delay decommissioning projects which would impact on the industry’s contributions to reducing emissions and achieving their net zero targets. Any delay could also potentially increase costs to industry and the taxpayer.
2. How the Bill will achieve this
The Bill will provide the Secretary of State with powers to establish a charging scheme. The charging scheme will specify which functions can be charged for.
3. Further information
The following documents are relevant to the measures and can be read at the stated locations: