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UK’s net zero path in turmoil? Tories push oil and Labour rows over hydrogen scheme

Conservative leader vows to extract all North Sea reserves while Energy secretary delays decision on flagship hydrogen scheme amid cabinet split

Nandita Banerji

  • Kemi Badenoch pledges to extract all remaining oil and gas from the North Sea, calling net zero “fanciful” (Financial Times).

  • Conservatives propose scrapping environmental rules, rebranding the North Sea regulator to maximise fossil fuel extraction.

  • Labour vows no new oil and gas licences but faces cabinet rift over BP’s £1.5bn H2Teesside “blue hydrogen” project (Telegraph UK).

  • Ed Miliband delays approval amid clash with Keir Starmer and Peter Kyle, who back a rival AI growth zone on the same site.

  • Britain’s net zero goal looks increasingly fragile, caught between Tory fossil fuel revival and Labour infighting.

Britain’s path to net zero has been thrown into uncertainty, with the Conservative opposition pledging to revive North Sea oil and gas extraction while Labour faces cabinet divisions over a flagship hydrogen project.

Kemi Badenoch, Conservative leader, said a future Tory government would extract “every last molecule” of oil and gas from the North Sea, according to the Financial Times. She pledged to strip environmental conditions from offshore regulation, rebranding the North Sea Transition Authority as the “North Sea Authority” with a single mandate to maximise fossil fuel production.

Badenoch described the UK’s move away from oil and gas extraction as “a unilateral act of economic disarmament”, arguing it was “absurd” to leave resources untapped while “neighbours like Norway” exploited the same seabed. She insisted the shift would prioritise “common sense, economic growth and our national interest”.

The Conservative pivot marks a sharp departure from the party’s previous stance. It was under a Tory government that the UK enshrined the net zero target in law in 2019 and hosted the 26th Conference of Parties (COP26) to the United Nations Framework Convention on Climate Change in Glasgow two years later. 

Badenoch, however, has dismissed the 2050 net zero deadline as “fanciful” and is seemingly tapping into public discontent over rising household energy bills.

Her stance sets up a clear confrontation with the Labour government. Labour has vowed to block new oil and gas exploration licences, arguing they are incompatible with the Paris Agreement’s climate goals and will not lower consumer prices. Ed Miliband, energy secretary, has pledged to make Britain’s electricity carbon neutral by 2030, a target that would require massive investment in offshore wind, carbon capture and storage, and grid upgrades.

The Financial Times reported that Badenoch also linked Britain’s rapid emissions cuts since 1990 to higher energy costs, while presenting fossil fuel security as a matter of national security after Russia’s invasion of Ukraine. The Department for Energy Security and Net Zero responded that new oil and gas discoveries “will not take a penny off bills, cannot make us energy secure and will only accelerate the worsening climate crisis”.

Labour’s clean energy plan meets Teesside roadblock

Yet Labour’s own commitment to net zero is facing turbulence. British news outlet The Telegraph reported that Miliband has delayed a decision on BP’s proposed £1.5bn H2Teesside project, which aims to produce “blue hydrogen” from natural gas with carbon capture, after a row with cabinet colleagues.

The scheme, billed as capable of delivering 10 per cent of Miliband’s 2030 hydrogen production target, has run into opposition from Technology Secretary Peter Kyle and Prime Minister Keir Starmer, who want to reserve the same site for an “AI growth zone” featuring a major data centre.

Kyle has even consulted lawyers on ways to block Miliband from approving the hydrogen plant, The Telegraph reported. Tees Valley’s Conservative mayor, Lord Houchen, has sided with the data centre plan, calling it “the UK’s only truly globally competitive AI cluster” and warning that delays risk Britain falling behind the US and China.

BP, which is pursuing approval via a development consent order, has insisted it remains committed to H2Teesside but admitted no primary customer is lined up, reported The Telegraph. The company has clashed with Teesworks, the public–private partnership backing the AI project, over land rights and viability. If granted a DCO, BP could compulsorily purchase the site to proceed.

Miliband has now reset the statutory deadline, with a decision expected by late November. His department said all infrastructure planning decisions would be taken “in the national interest — helping deliver the Government’s Plan for Change”.