Britain introduced a 500 million pound ($776.33 million) tax relief for large shallow-water gas fields on Wednesday in a bid to boost its dwindling North Sea energy output and said it wanted the gas market to play a role beyond complementing renewable energy.
From Wednesday, new gas fields with 10-20 billion cubic metres (bcm) in reserves located in depths of less than 30 metres will be exempt from a 32 percent tax charge on the first 500 million pounds of income, the Treasury said on Wednesday.
“Gas is the single biggest source of energy in the UK. Today the government is signalling its long-term commitment to the role it can play in delivering a stable, secure and lower-carbon energy mix,” said the Chancellor of the Exchequer, George Osborne.
Projects will still pay a 30 percent Ring Fence Corporation Tax on all income from the field.
The measure is expected to cost the government 20 million pounds per year in reduced income, but the Treasury said it would create additional jobs and help Britain’s energy security.