[F12ASection 2: meaning of expenditure on “de-carbonisation of upstream petroleum production”U.K.
(1)Expenditure incurred by a company is expenditure on the “de-carbonisation of its upstream petroleum production” for the purposes of section 2 if—
(a)the expenditure is incurred in qualifying circumstances, and
(b)the main purpose, or one of the main purposes, in incurring the expenditure is to reduce greenhouse gas emissions in the carrying on by the company of its ring fence trade.
(2)For this purpose expenditure is incurred in qualifying circumstances if—
(a)it is incurred on the provision of an alternative energy asset which is to be used for the purpose of generating or storing power for use by the company in its upstream petroleum facilities,
(b)it is incurred on the modification of an asset so that it becomes an alternative energy asset which is to be used for that purpose,
(c)it is incurred on the provision of an asset (such as a cable or substation) where the asset is to be used to make a connection to the electric grid or to an alternative energy asset so that (in either case) the company can use the power generated in its upstream petroleum facilities,
(d)it is incurred for the purpose of reducing or eliminating flaring or venting,
(e)it is incurred for the purpose of capturing greenhouse gas emissions, or
(f)it is incurred for the purpose of monitoring or measuring greenhouse gas emissions (including with a view to detecting leaks of greenhouse gas emissions from the company’s upstream petroleum facilities).
(3)For the purposes of this section an asset is an alternative energy asset if the asset generates or stores power (wholly or mainly) from sources of energy other than fossil fuels.
(4)For the purposes of this section references to a company’s upstream petroleum facilities are to any facility used by the company for the purposes of its oil extraction activities.
(5)In this section—
“the electric grid” means—
(a)in Great Britain, anything which is a transmission system, or a distribution system connected to a transmission system, for the purposes of Part 1 of the Electricity Act 1989, or
(b)in Northern Ireland, anything which is a transmission system, or a distribution system connected to a transmission system, for the purposes of Part 2 of the Electricity (Northern Ireland) Order 1992,
“emissions” has the same meaning as it has in the Climate Change Act 2008 (see section 97),
“fossil fuel” has the meaning given by section 32M of the Electricity Act 1989, and
“greenhouse gas” has the same meaning as it has in the Climate Change Act 2008 (see section 92).]
Textual Amendments
F1S. 2A inserted (with effect in accordance with s. 12(7) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 12(4)