Trump's Fossil Push Collides with UK's Green Energy Shift

U.S. President-elect Donald Trump has sharply criticized the UK’s energy policy, calling it a “very big mistake” as he advocates for increased oil and gas drilling in the North Sea and the removal of offshore wind turbines. This stance aligns with Trump’s broader pro-fossil fuel agenda, which includes repealing policies from the Biden administration such as the pause on new liquefied natural gas (LNG) permits and offshore drilling restrictions. Trump’s recent comments were prompted by the UK’s decision to raise the Energy Profits Levy (EPL) on North Sea operators to 38% from 35%, effective November 1, 2024, with a revised expiration date of March 31, 2030. The tax is set to expire a year later than previously planned, adding to the financial burden on the sector.

The criticism from Trump comes amid growing concerns among UK-based energy firms about the viability of continued operations in the North Sea. For example, Apache Corporation, a Texas-based energy firm, announced in November 2024 that it would cease oil production in the UK North Sea by 2030 due to the unprofitable nature of the windfall tax. The company cited the EPL as a key factor in its decision, stating that continued production in the region would no longer be economically feasible. Brian Gilvary, chairman of Ineos Energy, echoed this sentiment, noting that the tax regime has made it impossible for companies to expand operations in the UK North Sea.

Trump’s remarks are consistent with his long-standing opposition to offshore wind energy, which he has described as an expensive and environmentally damaging energy source. In the U.S., offshore wind projects face significant uncertainty under a potential second Trump administration, as the President-elect has previously expressed skepticism about their economic viability. This stance contrasts with the UK’s broader strategy to increase its share of clean energy and reduce dependence on fossil fuels. The Labour Party, now in power, has emphasized the need to transition toward renewable energy while balancing the need for reliable energy supply.

The UK’s energy policy shift is part of a larger global trend in which governments are adjusting their energy strategies in response to geopolitical and economic pressures. The UK’s decision to raise the EPL follows similar moves in the U.S. and other countries to implement or increase taxes on energy producers amid concerns about climate change and energy security. While such policies aim to reduce carbon emissions, they have also contributed to uncertainty for energy companies, which are reassessing long-term investments in fossil fuel projects. The increased tax burden has raised concerns about the UK’s ability to maintain energy independence, as reduced investments in the North Sea could lead to greater reliance on imported energy sources.

Experts have highlighted the broader economic implications of Trump’s energy policy preferences and their potential impact on global markets. Analysts point out that Trump’s emphasis on lower oil prices and reduced borrowing costs has been interpreted as a sign of economic optimism, but these trends may also reflect expectations of a slowdown in global demand. For instance, oil prices dropped by about 15% in the week following Trump’s announcement of new tariffs, as investors anticipated potential economic disruptions. While lower oil prices may benefit consumers in the short term, they could also signal reduced economic activity, which could further drive down demand for energy.

The U.S. and UK energy policy debates are occurring against the backdrop of a broader geopolitical struggle over access to critical minerals and resources, particularly rare earth elements, which are essential for modern technology and green energy infrastructure. Recent developments have seen the U.S. and China reach an agreement to expedite rare earth exports, following a period of trade tensions that included export controls and retaliatory tariffs. The agreement, announced by a White House official in June 2025, aims to stabilize supply chains and ensure continued access to critical minerals for high-tech and defense industries.

Despite these diplomatic efforts, analysts caution that the U.S. and its allies face significant challenges in reducing their dependence on China for rare earth processing and refining. China controls approximately 85% of global processing capacity and has developed advanced technologies that allow for high-purity rare earth extraction. While other countries, including Australia, Canada, and the European Union, are investing in alternative supply chains, their production capabilities remain limited compared to China’s. The U.S. has also taken steps to support domestic rare earth production, but these initiatives remain in the early stages and are unlikely to offset the country’s reliance on Chinese imports in the near term.

The interplay between energy policy, trade relations, and resource availability is shaping the global economic landscape, with rare earth elements and fossil fuels at the center of strategic discussions. As countries navigate these challenges, the decisions made by leaders like Trump and the UK’s Labour Party will have lasting implications for energy markets, supply chains, and international relations.