Five years of emission cuts bring UK’s 2030 oil & gas decarbonization targets within reach, but more needed for cleaner energy

Based on the latest report on emissions in the oil and gas industry by the UK’s regulator, the North Sea Transition Authority (NSTA), progress has been made on the decarbonization journey, however, additional effort is still required to ensure the industry will meet key emissions targets and adopt long-term reduction methods for the net-zero future.

According to the NSTA’s latest ‘Emissions Monitoring Report,’ the North Sea oil and gas industry delivered a 4% decrease in emissions for the fourth year in a row in 2023. This contributed to an overall reduction of 28% between 2018 and 2023, paired with a 49% reduction in flaring thanks to more efficient operations – with flaring down by 2.4% in 2023 – stricter controls, and fines for unpermitted activity.

While this is commendable, the NSTA warns that production needs to get cleaner and electrified for the sake of the sector’s future. The industry has committed to reaching net zero by 2050, and a 90% emissions reduction by 2040, in addition to accepting interim targets, such as cutting emissions in half by 2030. 

Hedvig Ljungerud, NSTA’s Director of Strategy, said: “Cutting greenhouse gas emissions by more than a quarter in five years is an impressive achievement in the North Sea, where operators have taken real action and made substantial investments. However, for domestic production to be justified, it must continue to become cleaner. The NSTA will hold industry to account on emissions reductions, including on decisions today that could have an impact for decades to come, to ensure the nation can benefit from its domestic resource even as we transition.”

Active emissions reduction measures are thought to be responsible for half of the reductions achieved since 2018 and the decrease is attributed to a combination of the NSTA’s proactive approach and industry efficiencies and investment in cleaner technologies. Despite this feat, emissions intensity, or greenhouse gases emitted for every barrel produced, increased from 22 kgCO2 e/boe in 2022 to 24 kgCO2 e/boe in 2023, paired with a drop in production.

While this is said to be common in more mature basins, it should not be used as an excuse for lack of action, the authors warn. As the report places the UK’s upstream offshore emissions intensity at a level more than 30% lower than the global average, the report notes the UK Continental Shelf (UKCS) production needs to continue this pace.

The NSTA claims it will continue monitoring the industry’s progress in terms of its net zero commitments. One of the mechanisms helping it to do so is the emissions reduction plan, or OGA Plan, published in March to put operators on track to reach net zero.

As suggested in the report, the North Sea industry can play a vital role in accelerating the transition while supporting the nation’s energy security. The country still needs oil and gas and is likely to continue importing it until 2050. As the carbon intensity of producing gas on the UKCS is almost four times lower than importing LNG, the report proposes a focus on domestic production.

Although the sector’s production emissions account for just over 3% of overall UK emissions, gas imported from Norway via pipeline is said to be cleaner than the one produced locally, despite similarities between the two basins. Thus, if domestic production is to continue, it needs to become cleaner. More than a dozen major decarbonization projects are in the works, mostly involving platform electrification and flaring reduction. One of these was put forward by TotalEnergies when it committed to invest in a flare gas recovery system at the Elgin-Franklin field. 

Since last year’s report was published, a potential first-power date was set for a “major,” full-electrification scheme. Additionally, a partial electrification project and an electrification-ready development were also approved. While the name of the latter has not been disclosed, it most likely refers to greenlighting the development of the Rosebank field and its floating production storage, and offloading (FPSO) unit Petrojarl Knarr, designed to be electrification-ready.

Described as the largest undeveloped oil field in British waters, Rosebank has been the bone of contention between the developers, Equinor and Ithaca Energy, and climate organizations, which decided to take the government to court over it last December. Matters were made more complicated in July when the UK’s Supreme Court ruled that emissions from burning oil and gas need to be taken into account when approving projects, followed by the UK government’s decision not to participate in the legal case.

As the volume of emissions that can be avoided is decreased the longer it takes to commission a project, the operators are urged to propose decarbonization initiatives. The NSTA reiterated that electrification, or an alternative source of low-carbon power, has the greatest potential for emissions reductions, as fuel combustion for power generation makes up four-fifths of production emissions. Therefore, emphasis was placed on operators making final investment decisions on more of these projects.