This proposed change, part of a commitment to secure the country's energy needs while maintaining environmental standards, will be detailed in the King's Speech.
Under this policy, licenses will be awarded only if domestic production is deemed necessary to reduce reliance on foreign imports and if it can be done with lower emissions than importing gas. The policy is a response to the UK's continued need for oil and gas amid a transition to net zero by 2050 and aims to balance energy security with climate commitments.
Greenpeace criticizes the move, planning to challenge it legally, while the Labour Party has indicated it would not grant new licenses if it came to power, citing fossil fuel dependence as a factor in the cost of living crisis.
The government argues that domestic production is essential to reduce dependence on energy imports from potentially hostile regimes.