Budget 2023: The decarbonisation allowance in the Energy Profits Levy

Energy Profits Levy: Decarbonisation Allowance

This measure introduces a higher investment allowance rate within the Energy Profits Levy for expenditure incurred on or after 1 January 2023 on the decarbonisation of oil and gas production. Qualifying expenditure will get allowance at 80%, compared to the main rate of 29%. Qualifying expenditure includes capital expenditure on powering oil and gas production facilities from non- fossil fuel sources, and the reduction or elimination of flaring and venting of greenhouse gases, helping to support the oil and gas sector’s transition to Net Zero by 2050.