Tax relief for oil and gas ‘could insulate two million homes’

The new measures announced by the Treasury incentivise a slower energy transition, a think tank suggests

Big Zero Report 2022

Nearly two million homes in the UK could be fitted with insulation measures funded by the revenue generated by the Energy Profits Levy.

A few days ago, the government announced new measures to address the cost of living crisis.

Among these new measures, the Chancellor unveiled a new 25% energy profits levy that will be charged on the profits that oil and gas companies are currently making.

Alongside the new levy, the Chancellor announced a new 80% investment allowance – he suggested the investment allowance would lead to tax relief of more than 91p for every £1 invested.

A report by the independent think tank E3G estimates the subsidy could be up to £5.7 billion in tax relief for investment in oil and gas in the next three years.

The authors of the report note this lost revenue could have supercharged an energy efficiency drive, insulating millions of British homes with an average energy bill saving of £342 per household every year.

ELN has contacted the Treasury for a response.

If you enjoyed this story you can sign up to our weekly email for Energy Live News – and if you’re interested in hearing more about the journey to net zero by 2050, you can also sign up to the future Net Zero newsletter. 

Latest Podcast