UK issues tougher environmental rules for new North Sea oil and gas drilling

By William James and Susanna Twidale

LONDON (Reuters) -Britain has issued tougher new environmental rules for fossil fuel projects with implications for the development of two vast North Sea oil and gas fields by Shell and Equinor.

U.S. President Donald Trump has called on the UK to speed up rather than slow down projects in the North Sea while overseeing a softening of green requirements in the U.S.

Approval for new projects must now take into account the environmental impact of emissions from using or burning the fuels extracted, the UK's Department for Energy Security and Net Zero announced on Thursday.

These so-called downstream, or Scope 3, emissions, were not previously part of the consenting process.

This "will ensure the full effects of fossil fuel extraction on the environment are recognised in consenting decisions," the department said.

In January a Scottish court had ruled that approval of two North Sea projects - Shell's Jackdaw and Rosebank involving Equinor and Ithaca Energy - was unlawful and must be retaken.

The firms had awaited the new guidance to reapply for approval.

Shell is reviewing the guidance and remains committed to delivering the Jackdaw project, a spokesperson said.

Equinor and Ithaca Energy also said they remained focussed on advancing the Rosebank project. Equinor said it would submit an assessment under the new guidance.

Britain has a target to reach net zero emissions by 2050. The Labour government last year said it would not issue any new oil and gas licences but would not revoke those granted by the previous government.

Energy Minister Ed Miliband will have to decide whether the projects are compatible with the new guidance and the UK's climate targets. He is expected to take a final decision in the autumn at the earliest.

Miliband has frequently spoken of the country's need to reduce its reliance on fossil fuels to drive down costs and improve energy security but has also said oil and gas will play a role in the country's economy for many years to come.

Environmental groups Greenpeace and Uplift had legally challenged the North Sea projects.

"The new rules mean that oil and gas companies will finally be forced to come clean over the enormous harm they are causing to the climate," said Tessa Khan, executive director of Uplift.

(Reporting by William James and Susanna Twidale; additional reporting by Nora Buli; editing by David Evans and Jason Neely)