Energy / ‘Windfall’ tax harming Sullom terminal operator EnQuest, first minister says
FIRST minister John Swinney has taken aim at the UK Government’s energy profits levy – and said Sullom Voe Terminal (SVT) operator EnQuest is “wrestling” with a challenging financial climate as a result.
Swiney was visiting SVT on Monday as part of a visit to Shetland, which has also included a trip to Unst.
A recently published study from the University of Strathclyde’s Centre for Energy Policy (CEP) highlighted that more than 400 jobs could be lost across the Shetland economy by 2050 if no action is taken to transition SVT to low-carbon fuels.
The CEP has urged backing to be given to planned low-carbon fuel production at Sullom Voe – which it says could almost offset all job losses.
Shetland News reported this month that the first phase of the e-fuels proposals at a revamped SVT would need £300 million in investment.
Also planned at SVT by Veri Energy – a subsidiary of EnQuest – is facilitating carbon capture and storage.
The CEP said the message from its analysis was “clear” – if nothing was done to transition SVT away from oil and gas then the effect on Shetland “will extend well beyond the terminal gates”.
It had said that “if we are to avoid another Grangemouth or Mossmorran, in a highly vulnerable remote island community, early action to ensure a commercially viable transition to e-fuel and other low-carbon activities at SVT is becoming increasingly critical”.
Speaking to Shetland News after a visit to the terminal, Swinney said he welcomed what EnQuest was doing – “investing and trying to find a sustainable route” to maintain employment and opportunity at SVT.
But he placed blame on the UK Government’s so-called “windfall” tax applied to profits from oil and gas.
EnQuest announced today (Monday) that it had paid $104 million in total towards the levy in the first half of 2025.
“They are wrestling with a fiscal climate that is challenging because of the energy profits levy that’s applied by the UK Government which is basically suppressing investment,” Swinney said.
He said that he spoke to prime minister Sir Keir Starmer last Monday in which he highlighted the “damage” he said is being done by the levy.
“I will continue to argue that case because I think it’s absolutely necessary,” Swinney said.
He added that there were “really exciting carbon capture and storage opportunities” at SVT which he is “keen to make sure that they’re advanced”.
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