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The UK is less attractive than the United States for energy investment, due to the high windfall taxes on energy producers in Britain and the lack of incentives for clean energy investments similar in scale to the American provisions to boost green energy, Shell’s CEO Wael Sawan told The Times in an interview published on Monday.
The UK government should “take a page from some of the things that the US have done recently, through the Inflation Reduction Act,” Sawan told the newspaper.
The IRA has nearly $370 billion in climate and clean energy provisions, including investment and production credits for solar, wind, storage, critical minerals, funding for energy research, and credits for clean energy technology manufacturing such as wind turbines and solar panels.
The EU also seeks to bolster policies to support the EU’s clean technology manufacturing and preserve the bloc’s competitiveness in the face of the U.S. Inflation Reduction Act and massive subsidies in China.
The UK, for its part, is discouraging investments with sudden changes, regulatory permitting hurdles, and uncertainty over subsidies and windfall taxes, Shell’s Sawan told The Times.
The RenewableUK group called on the government last month to stop intervention and uncertainty and start looking at what the U.S. is doing in terms of supporting green energy investments.
“At a time when the USA has set up a much more positive policy and regulatory environment for investors, the UK is continuing to develop policies which would increase uncertainty and dampen investment,” RenewableUK said in a report.
Shell, which has planned to invest $30 billion (£25 billion) in the UK energy system over the next ten years, is now re-evaluating each project comprising the investment plan, after the UK raised the windfall tax, officially known as the Energy Profits Levy (EPL), to 35%.
Last year, Shell said it planned to invest £20-25 billion in the UK energy system over the next 10 years, with more than 75% of this intended for low and zero-carbon products and services, including offshore wind, hydrogen, carbon capture utilization and storage (CCUS), and electric mobility.
The levy is “fundamentally disincentivizing the investment in new supplies which are critical if you want to build energy security for the long term,” Shell’s top executive told The Times.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.