Oil and gas companies and other businesses are already taxed on the emissions they produce through the Climate Change Levy, including industrial, commercial, and agricultural activities. Additionally, fossil fuel consumption is taxed through the carbon price support rates of the Climate Change Levy on natural gas, liquified petroleum gas, and coal and other solid fossil fuels used to produce electricity.
Oil and gas companies that operate in the UK or on the UK Continental Shelf are also taxed through the Energy Profits Levy. This was introduced by the previous Government in 2022 at a time of extraordinary profits for the oil and gas industry, when wholesale oil and gas prices rose following the outbreak of the war in Ukraine. Despite both oil and gas prices and industry profits having since decreased, the Government has chosen to extend the Energy Profits Levy and increase the rate at which it is charged.
The UK is ultimately only responsible for 1 per cent of global emissions. Burdening industry with even more taxes would only further the damage caused to our economy by the rush to achieve net zero, leading to more closures and job losses and risking even higher energy bills for families and businesses. It is vital that we ensure our climate policies are practical and protect families and businesses from unnecessary costs, showing that prosperity and living standards can still be maintained and energy can be kept affordable to encourage other major polluters such as China to go further in tackling climate change.
