Oil and gas industry bodies have been strongly against the tax, arguing it has made investment in the sector less attractive.
In 2024, when the levy was increased from 35% to 38%, 42 companies wrote to the government to express their “grave concern” over the changes.
The decision not to change the levy in the November 2025 Budget was also criticised by the industry.
Trade body Offshore Energies UK (OEUK) had argued that reforming the tax would ultimately increase income for the government, as it would unlock investment which would protect thousands of jobs and, over time, lead to higher tax receipts
Following the Budget, OEUK said the failure to reform the EPL in 2026 would “cost tens of thousands of jobs, cripple investment, and undermine Scotland and the UK’s energy security”.
A government spokesperson said: “We’re giving the sector and its investors the long-term certainty to plan, invest and support jobs with plans to replace the Energy Profits Levy when it ends by 2030, or earlier if its price floor is triggered.
“We are also making sure the North Sea has a prosperous and sustainable future through record investment that helps deliver the next generation of skilled jobs while growing the clean energy industries of the future.”
