Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the adequacy of (a) the Energy Profits Levy and (b) other carbon-related taxes in preventing climate related damage.

The Energy Profits Levy (EPL) was introduced as a temporary additional surcharge on profits generated from oil and gas exploration and production activities in the UK, in response to extraordinary global circumstances. The EPL has already raised over £11bn since its introduction to date. From 1 November 2024 the government introduced changes to the EPL, including increasing the rate by 3 percentage points to 38% and extending it to 31 March 2030. We also removed the EPL’s core investment allowance, which was unique to oil and gas and not available to any other sector, and retained the decarbonisation allowance in the EPL regime to support the sector to decarbonise.

The Government sees the tax system as one important lever to further environmental and climate objectives by encouraging behaviour change and supporting greater investment in cleaner technologies. The government ensures the tax system supports climate goals through measures such as the Carbon Price Support and Climate Change Levy.