Energy Profits Levy and the Energy Security Investment Mechanism: discussion note
A discussion note to seek views on the technical details and practical application of the Energy Profits Levy’s (EPL) Energy Security Investment Mechanism (ESIM).
The government has announced the introduction of the Energy Security Investment Mechanism (ESIM). This confirmed that the Energy Profits Levy (EPL) will permanently be disapplied if average oil and gas prices are both at or below the ESIM price threshold for two consecutive quarters. The ESIM price threshold was calculated using a 20-year historic average to the end of 2022 and is set at $71.40 per barrel of oil and £0.54 per therm of gas. The government will introduce legislation to remove the EPL if the ESIM is triggered.
Whilst the key parameters of the ESIM have been set, the government would like to engage with industry experts, financial institutions, tax specialists and interested stakeholders to discuss the technical detail and practical application of the ESIM.