Guidance

Ending new oil and gas licences and introducing Transitional Energy Certificates

Published 4 November 2026

Factsheet relating to the Energy Independence Bill.

Summary

In line with our North Sea Future Plan, we will show climate leadership by implementing our manifesto commitment to not issue new licences to explore new oil and gas fields, including delivering our commitment to ban fracking. We will also support the management of existing offshore oil and gas fields for their lifetime by introducing Transitional Energy Certificates (TECs).

Why are we legislating?

Ending new licensing to explore new oil and gas fields is intended to send a clear signal of our commitment to the global 1.5 °C climate goal. Furthermore, North Sea oil and gas production is in natural decline. Production in 2025 was 75% lower than its peak years (1999 for oil and 2000 for gross gas). Further licensing would not reverse its natural decline, nor change the UK’s status as a net importer of oil and gas.

However, the government recognises that North Sea oil and gas production will remain an important part of our energy mix for decades to come. We are introducing TECs offshore to support the management of existing oil and gas fields for their lifespan. TECs will enable some additional oil and gas production in areas bordering or in close proximity to already licensed fields (linked by a tieback), or in areas that are already part of an existing field. This will help ensure that existing fields remain economically viable, while ensuring there is no new exploration on currently unlicensed areas for oil and gas in the North Sea. TECs can also be issued onshore and offshore to cover any unavoidable incidental production of oil and gas during certain activities other than oil and gas production which are licensed or permitted under other regimes.

Onshore, this means we will implement plans to not issue new licences to explore new fields (in England), including those which could be used for hydraulic fracturing for shale gas (‘fracking’).

What are the government’s objectives with this measure?

The North Sea is a mature basin, and production has been naturally declining over the past 25 years. The government’s objective is a managed, orderly and prosperous transition for the North Sea, in line with our climate obligations and the opportunity for the UK to demonstrate global climate leadership. The North Sea does however remain a vital asset supporting jobs, growth and UK energy security. We have always been clear that oil and gas will continue to play an important role in our energy system for decades to come, alongside renewables, nuclear and other low-carbon technologies. Introducing TECs is a pragmatic approach which recognises the continued role of the oil and gas sector in supporting jobs and economic activity, while also delivering on our climate obligations. This will sustain long-term jobs, growth and investment across North Sea communities as the energy sector transitions.

How will this measure deliver these objectives?

The Bill removes the NSTA’s power to grant new oil and gas licences. This demonstrates global climate leadership by aligning future domestic oil and gas production more closely with climate science and supporting international efforts to reduce reliance on fossil fuels.

We recognise the role that oil and gas will play for decades to come. By supporting the management of existing fields, we can sustain shared infrastructure, a skilled workforce and supply chains, providing greater certainty as the energy sector evolves. It also helps create the conditions for long-term reindustrialisation and enables continued investment in the new industries that will shape the North Sea’s future. This will help the UK become a leader in renewable energy and secure the benefits of a diverse, home-grown energy system.