London Daily

Focus on the big picture.
Monday, Jul 13, 2026

Climate change: UK government oil and gas subsidies hit £13.6bn since Paris Agreement, campaigners say

Climate change: UK government oil and gas subsidies hit £13.6bn since Paris Agreement, campaigners say

Tax breaks for decommissioning oil and gas infrastructure in the North Sea are being challenged in the High Court in December by campaigners, backed by groups linked with Paid to Pollute.

The UK government has handed the oil and gas industry £13.6bn in subsidies since the landmark Paris climate accord was signed in 2015, according to campaign group Paid to Pollute.

Its analysis of new OECD data claims that from 2016 to 2020 companies received £9.9 billion in tax reliefs for new exploration and production and £3.7 billion in payments towards decommissioning costs.

Tax breaks for decommissioning oil and gas infrastructure in the North Sea are being challenged in the High Court in December by campaigners, backed by groups linked with Paid to Pollute.

Mikaela Loach is one of three complainants challenging oil and gas industry tax breaks in court


One of the complainants, climate activist Mikaela Loach, told Sky News: "No one's calling for the tap to be turned off tomorrow - that's just industry scaremongering.

"The UK has enough oil and gas already in production to see us through this transition. We don't need any additional fossil fuel developments."

There are 18 UK oil and gas projects in the pipeline that, if approved, could enjoy these subsides, including the Cambo oil field north-west of the Shetland Islands.

In the Glasgow climate pact from COP26, countries including the UK committed to "phasing down" inefficient fossil fuel subsidies and reaffirmed their commitment to limit warming to 1.5C above pre-industrial levels.

To hit that target, the world must reach net zero emissions by 2050, which means there can be no new oil and gas developments after this year, the International Energy Agency (IEA) has warned.

The financial think tank Carbon Tracker has warned that the 1.5°C target means Cambo and at least four other proposed projects risk becoming stranded assets with little or no economic value.

The group's head of oil gas and mining, Mike Coffin, told Sky News: "Any organisation that is claiming alignment with the 1.5C goals of the Paris agreement, or Net Zero 2050, cannot simultaneously be supporting new oil and gas projects going ahead.

"Many projects - including for example Cambo - are potentially uneconomic, even under slower transition scenarios which result in warming in excess of 1.5 degrees."

Paid to Pollute acknowledges that its expanded definition of tax break differs from the government's, but says it does meet the criteria as set by the World Trade Organisation and the International Monetary Fund.

The UK Government, however, says it does not give any subsidies to fossil fuels, and follows the IEA's approach to phasing them out.

A spokesperson said: "No other significant oil and gas producing nation has gone as far as the UK in supporting sector's gradual transition to a low carbon future, as demonstrated by our North Sea Transition Deal.

"While we are backing the UK's oil and gas industry's transition to green energy, there will continue to be ongoing but diminishing need for oil and gas over the coming years while we ramp up renewable energy capacity, as recognised by the independent Climate Change Committee."

Newsletter

Related Articles

0:00
0:00
Close
United Kingdom Financial Markets Monitor Business Response to Economic Policy Changes
Scottish Renewable Energy Expansion Highlights Need for Faster Grid Development
Wales and Regions Strengthen Focus on Economic Development Through Tourism and Investment
Retail Industry Warns High Street Businesses Remain Under Pressure
Police Chiefs Highlight Growing Challenges Managing Protests and Public Order
Agriculture Leaders Seek Clarity on Post-Brexit Farming Support and Environmental Rules
Transport Unions Warn of Further Industrial Action Over Pay and Working Conditions
Welsh Tourism Sector Reports Strong Growth Driven by Domestic and International Visitors
National Infrastructure Review Gains Support as Leaders Seek Faster Project Delivery
Financial Markets Assess Impact of United Kingdom Corporate Tax Policy Changes
Northern Ireland Assembly Debates Cross-Border Trade and Infrastructure Cooperation Plans
Government Opens Consultations on Housing Reform and Planning System Changes
Scottish Government Faces Pressure to Accelerate Offshore Wind and Grid Expansion
National Energy System Operator Warns Grid Investment Is Needed for Future Electricity Demand Growth
United Kingdom Research Council Invests in Artificial Intelligence and Biotechnology Innovation Hubs
United Kingdom Expands Oversight of Skilled Worker Visa Sponsors Amid Migration Debate
Cross-Party MPs Call for National Infrastructure Strategy Review to Accelerate Economic Growth
Prime Minister Announces One Billion Pound NHS Funding Package Ahead of Winter Pressures
Bank of England Signals Cautious Approach to Interest Rates as Inflation Remains Above Forecasts
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Netflix Weighs Always-On Channels, Bundles and Short-Form Video
Passenger Is Pulled Partly Outside Ryanair Jet After Window Fails Mid-Flight
Innovation-led growth strategy
Public service reform pressure
Defence and industrial security
Labour leadership transition and economic reset
Northern England Pushes for Greater Influence in Britain’s Future Economic Model
UK Technology Strategy Focuses on Life Sciences, Digital Innovation and Research Investment
Britain and United States Maintain Focus on Pharmaceuticals Cooperation and Industrial Growth
UK Public Services Face Continued Pressure as Government Promises Visible Improvements
Regional Economic Power Becomes Key Theme in Britain’s Next Political Phase
Britain Expands Support for Small Businesses as Firms Seek Better Access to Finance
UK Economy Remains Central Political Challenge as Cost of Living and Growth Concerns Persist
National Health Service Introduces New Workplace Reviews to Improve Conditions for Healthcare Staff
UK Life Sciences Sector Secures More Than Three Billion Pounds in Investment to Support Innovation
Britain Strengthens Defence Strategy as Security Concerns Reshape Military and Industrial Policy
Andy Burnham Promises Stronger UK Defence Industry and Expanded Domestic Production
UK Government Faces Difficult Spending Choices as Labour Leadership Transition Approaches
Rachel Reeves Warns Andy Burnham of Immediate Economic Challenges After Expected Leadership Change
Andy Burnham Prepares to Lead UK Government With Plans for Regional Power Shift and Economic Reset
Government Creates Emergency Support Scheme for Financially Struggling Universities
United Kingdom Replaces Traditional Farm Subsidies With Payments Linked to Environmental Performance
National Grid Reports First Week of Electricity Generation Without Fossil Fuels
United Kingdom Financial Regulator Introduces Tougher Capital Rules for Cryptocurrency Exchanges
Belfast Harbour Expands Operations to Attract Investment Through United Kingdom and European Union Market Access
Scottish Government Threatens Legal Challenge Over Westminster Cuts to North Sea Transition Funding
United Kingdom Accelerates Trans-Pennine High-Speed Rail Project Linking Northern Cities
United Kingdom Secures Ten Billion Pound Investment for Cambridge Quantum Computing Campus
Port Talbot Steelworks Wins Support for Green Hydrogen Transition and Protection of Industrial Jobs
United Kingdom Sends Royal Navy Carrier Strike Group to Indo-Pacific as Regional Security Focus Expands
×