Written evidence submitted by OPITO (NRG0006)

Call for Evidence: GB Energy and the net zero transition

1. What impact will the UK Government’s approach to net zero have on Scotland’s oil and gas industry?

The UK Government’s path to achieving net-zero by 2050 risks decimating Scotland’s oil and gas sector[1], incurring job losses, continuing to create an unattractive and unstable investment environment, and damaging energy security. While a gradual decline in oil and gas production is expected, it is vital to offer re-skilling and cross-skilling opportunities to workers to prevent workforce exodus overseas, as job growth in renewables is not yet sufficient.

OPITO, the global skills body for the energy industry, is supporting an equitable transition for workers, ensuring their skills are transferable to renewables sectors like offshore wind, hydrogen, and CCUS. However, OPITO has grave concerns about the government's lack of a clear, cohesive transition roadmap, which could destabilise communities and weaken energy security.

OPITO urges more government action to ensure a managed transition, balancing support for both oil and gas and renewable sectors. Investment in clean energy and green technology innovation is essential for the UK to retain its standing as a global leader in renewable activity. Diversifying the economy and gradually reducing reliance on oil and gas is key to protecting the UK from unstable foreign markets and to avoid carbon leakage, but a pragmatic and phased approach must be adopted.

Net-zero policy decisions must include support for communities reliant on oil and gas jobs. The UK Government must ensure these communities have clear access to new opportunities, particularly in renewable energy projects. While OPITO supports increased investment in renewables, this should not undermine the oil and gas sector that has supported the UK economy for decades.

OPITO is committed to collaborating with government, GB Energy and industry to ensure a skilled workforce is available for both the existing and emerging energy sectors, helping the UK meet its net-zero ambitions while maintaining economic stability and energy security.

1. What state of readiness is the oil and gas sector in for the net zero transition?

The oil and gas sector has a strong history of innovation and adaptability, making it well-positioned to support the UK’s transition to net-zero. With a skilled and transferable workforce, the sector can contribute significantly to emerging renewable energy fields. However, the UK Government’s current policy regime, which is prematurely limiting oil and gas activities, risks pushing skilled workers overseas and  impacting the success of the energy transition. The UK Government must undertake an urgent review of the impact an embargo on further licensing activity could have to both net-zero targets, and economic and energy stability.

The oil and gas supply chain in the UK is already evolving to support the country’s net-zero goals, but it requires a stable investment and policy environment to continue its transformation into a cross-energy proposition. Without this, there is a danger that organisations will prioritise international opportunities over sustained, domestic investment.

2. Is the scaling up of the clean energy sector keeping pace with the decline of jobs and investment in the oil and gas sector, or does the UK Government need to do more to close this gap?

OPITO supports the UK’s goal of creating thousands of jobs in the clean energy sector, with projections suggesting there could be as many as 260,000 offshore energy jobs by 2030.[2] However, the transition from oil and gas to renewables presents significant challenges.

Job losses are expected in the oil and gas sector, with tens of thousands potentially lost in the North Sea by 2030 due to field declines and factors like windfall taxes and reduced investment.[3] This threatens the skilled workforce needed for future renewable energy infrastructure.

The UK government must accelerate investment and development in renewables to ensure there are enough opportunities for workers transitioning from oil and gas. The current pace of transition is skewed, and more oil and gas activity will be needed to bridge the gap until renewables can scale-up and cover the jobs delta. In OPITO’s view, oil and gas must be part of the path to net-zero; current policy does not adequately reflect a managed, nor a just, transition for the incumbent workforce.

OPITO can support by standardising skills transfer avenues and providing training, qualifications, and standards, while also urging faster deployment of renewable projects and grid infrastructure to create job opportunities.

2. What UK Government interventions will be necessary to maximise the ability of oil and gas workers to find jobs in clean energy?

Under the previous UK government, OPITO convened and led a group known as the Energy Skills Alliance (ESA). In May 2022 OPITO, supported by the ESA, published an ‘Integrated People and Skills Strategy’[4], which served to address the relevant commitments cascading from the North Sea Transition Deal.

The Strategy has succeeded in supporting energy transition activity by focusing on the relationship and joint goals between the workforce, broader industry, the UK Government and devolved nations, and the communities concerned. The government must continue to work with industry to reduce duplication of effort, training and certification requirements to better drive efficiency and recognition across sectors. This will allow for a more mobile workforce and better enable project fulfilment. The OPITO-led Skills Passport initiative, now being championed by Offshore Energies UK and RenewableUK is a prime example of what activity the government must strongly endorse.

OPITO stands strongly behind the position that a sector deal approach is of benefit to the wider industry, and its people, and that greater and visible endorsement and support of that work is required from the government.

3. Are Scotland’s energy industry and associated supply chains well-placed to transition to clean energy generation, or is more support needed?

Supply chains servicing Scotland are strategically well-placed to support the transition due to their rich experience, agility for change, and international outlook across oil and gas, marine, port and engineering operations. That said, the supply chain must complete its diversification process into a fully integrated proposition; targeted improvements to key infrastructure must be affected, policy decisions must be transparent and stable, measures like ‘Prompt Payment’ must be adhered to, and the merits and utility of the current, oil and gas workforce must be recognised.

OPITO is committed to charting pathways across the integrated energy sectors, and a great deal has already been done, in conjunction with industry, to present possible career routes in an accessible and concise format. This benefits operators and developers, as well as supply chain companies, and is critical to provide industry cohesion, and reassurance to the workforce.

As referenced in question two, more is required at government level to provide visibility and endorsement of that work, and ensure that the attractive proposition that the energy industry represents is communicated and marketed effectively. OPITO’s experience across the energy industry, and specialised focus in future skills activity, STEM education, and apprenticeships would be a prime support network for the government.

4. What actions should the UK and Scottish Governments take to ensure the necessary generation and transmission infrastructure to support the development of Scotland’s renewables sector?

Close collaboration between the UK and Scottish Governments is critical to ensure strategic alignment between overarching industrial and energy strategies, as well as singular decision-making on energy policies and infrastructure projects. Investing in skills development is critical to ensure a homegrown workforce are available, motivated, and capable of supporting the growing renewable energy sectors.

Both governments, with the help of GB Energy, should do more to support local energy schemes, and ensure that affected communities are energy project benefactors, not inhibitors. It is important that both governments work to streamline planning and consenting processes for renewable energy projects too; this involves providing additional resources to local authorities to handle the growing volume of applications and ensuring that the planning system is efficient and responsive.

Additionally, a joined-up approach in terms of STEM education must be endorsed. OPITO’s My Energy Future platform could support this.

5. How can GB Energy, and other ways of backing industry (including funding), most effectively support employment, economic growth and the development of clean energy supply chains in Scotland?

OPITO would like to welcome GB Energy to its soon-to-be headquarters in Aberdeen. This move demonstrates a desire and willingness to harness and recognise the experience of those working across the energy sector in the North East.

It will be essential that GB Energy works alongside with and collaborates fully with stakeholders, like OPITO, within the industry that can help it fully understand the landscape, and the challenges being faced.

GB Energy must be aware of the existing and established supply chain organisations, and champion the skilled workforce that is already available. Transparency and openness are essential to gain trust and highlight opportunities available within Scotland.

6. How should GB Energy work with the Scottish Government and other Scottish bodies to identify appropriate funding and other mechanisms?

Collaboration must play a vital role, regardless of devolution implications. The Scottish Government and GB Energy must help support the industry to ensure appropriate employer awareness and understanding is in place with respect to what funding is available for training and cross-skilling avenues.

The process of applying for or claiming funding must be simplified, and must be straightforward and consistent.  This is seen specifically with respect to the Apprenticeship Levy; a digital account, which exists in England, is not mirrored across the devolved nations, so a more universally accepted approach is required. It is hoped that this will be supported by the introduction of the Growth and Skills Levy, as a barrier to employers in many cases is the constrained and confined way monies can be allocated.

GB Energy must also engage proactively to this end with Skills Development Scotland and the Scottish Funding Council. Balanced, measured, and consistent policy decisions will also support this narrative and provide assurance that prospective investments are targeted properly and made in good faith.

Targeted campaigns should be delivered to highlight the benefits to employers, as well as the broader industry, of the benefits of investment and having access to a highly skilled, motivated, and capable workforce.

7. What does a just transition look like for workers and communities across Scotland’s highland and island communities, and what role might community energy and community benefits play in this?

A just transition for workers and communities across Scotland’s Highlands and island communities should aim to ensure that the shift to a low-carbon economy is fair and equitable, including the following elements:

• Job Security and Creation: ensuring that workers in traditional industries, such as oil and gas, are supported through retraining and reskilling programs to transition into new, sustainable jobs in sectors like renewable energy, low-carbon manufacturing, and green technology.
• Community Involvement: engaging local communities in the planning and implementation of transition strategies to ensure that their needs and voices are heard. This includes creating opportunities for community-led renewable energy projects and local economic development.
• Investment in Education and Training: providing access to education and training programmes that equip workers with the skills needed for the green economy. This includes partnerships between government, educational institutions, and industry to develop relevant curriculum features and training opportunities. These opportunities then must be communicated to prospective workers as exciting and dynamic propositions; attraction must be a focus.
• Support for Vulnerable Groups: addressing the needs of vulnerable groups who may be disproportionately affected by the transition. This includes ensuring that new job opportunities are accessible to all, regardless of background, and providing targeted support where needed.
• Sustainable Economic Development: promoting economic diversification and the development of new industries that can provide long-term, sustainable employment. This includes investing in infrastructure and innovation to support the growth of green industries.
• Environmental and Social Justice: ensuring that the benefits of the transition are shared equitably and that the environmental impacts are managed responsibly. This includes protecting natural resources and ensuring that new developments do not harm local communities.
• Recognising Capability: ensuring that the heritage, experience, and value still very much present in the oil and gas sector is not lost, and the sector is treated as part of the solution, not the problem.

8. Can the UK learn lessons from international examples about how to effectively manage Scotland’s energy sector transition?

Key to growth, economic expansion, and the diversification of the UK’s global value proposition is knowledge-sharing, properly utilising incumbent expertise, and effective collaboration. The Scottish and UK Governments need to work with industry and overseas authorities with those drivers in mind, as all will support an environment where innovation can be improved, and research and development are enhanced. 

By adopting a partnership approach – a promise of the UK Government pre-election[5] – financial and operational risks associated with large-scale projects can be shared collectively. International partnerships can stimulate economic growth by creating jobs, fostering new businesses, and attracting investment.  This can be particularly beneficial in regions that require economic revitalisation.

There are several regions where the UK can take inspiration as to how to effectively manage a transition plan. Chief among these is Malaysia, with the publication of their National Energy Transition Roadmap.[6] Oil and gas must be part of the future-facing solution; current and unnecessary embargoes risk doing far more harm than good when we consider the UK’s long-term energy and national security.

January 2025