(Bloomberg) — Shell Plc’s new boss said Britain is less attractive as an investment destination than both the US and Europe because it is failing to match green energy subsidies, according to an interview with The Times of London.
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Wael Sawan, the oil major’s chief executive, told the newspaper that the UK government should “take a page from some of the things that the US have done recently, through the Inflation Reduction Act,” which, among other measures, allots billions of dollars in incentives for renewable energy companies. He also said the European Union was more attractive for energy investment.
Both the US and EU have committed hundreds of billions of dollars in clean energy and manufacturing subsidies to encourage domestic solar, wind and zero carbon industries.
The UK cannot match the funds but has outlined plans to increase private sector investment in green technologies of the future. The government has also urged the US and EU not to start a subsidy war.
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The warning comes just over a week before the budget, when the chancellor of the exchequer hopes to boost the UK’s investment credentials but will have little money with which to lure business.
Sawan said the energy profits levy, a tax on windfall profits made as a result of high oil and gas prices caused by the war in Ukraine, was “disincentivizing the investment in new supplies which are critical if you want to build energy security for the long term.”
He added that the UK’s constantly changing tax regime “saps your conviction” on investment and encourages companies to “move your capital.”
BP chief executive Bernard Looney last year said the windfall tax would not affect its North Sea investments. The government has structured the tax to incentivize investment.
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