Windfall tax risks undermining UK’s net zero progress

The UK government has been urged to rethink its windfall tax proposals, amid concerns they will incentivise energy firms to increase investment in oil and gas projects, thereby slowing the country’s progress towards achieving net zero emissions.

In a major policy U-turn last week, chancellor Rishi Sunak announced plans to impose an extra 25 per cent tax on the “extraordinary” profits of oil and gas giants, to help fund a £15bn package to tackle the cost-of-living crisis.