Chancellor Rachel Reeves has announced increases in North Sea taxes following pressure from environmentalists but the move won't provide the fatal blow to the controversial Rosebank oil field development off Shetland they hoped for.

Lead developer Equinor has indicated its enthusiasm for the Rosebank project remained undiminished following last week’s Budget. The Norwegian oil giant looks forward to starting production from the field within three years.

Other oil and gas firms were probably happier with the contents of the speech Ms Reeves delivered last Wednesday than campaigners who looked to her to use tax policy to support their fight for what they see as climate and social justice.

Ms Reeves confirmed the rate of the windfall tax levied on North Sea oil and gas firms would increase and that the investment allowance introduced alongside it in 2022 would be scrapped.

The investment allowance has provoked outrage among greens, who reckon it subsidises wealthy corporations to pursue climate-harming plans.

Outrage has focused on claims that the allowance could help Equinor enjoy tax breaks worth £3.75bn in support of its plan to develop the 500 million barrel Rosebank field.

READ MORE: SNP Government dithers as North Sea oil industry faces crisis

The main beneficiaries of the breaks will be foreign powers. The Norwegian Government has a 67% stake in Equinor. The firm’s partner in the Rosebank project, Ithaca Energy, is majority-owned by Israel’s Delek.

Rosebank has acquired totemic status for environmentalists who claim it will lead to emissions on a catastrophic scale.

“Burning all of the oil and gas in this field will produce the equivalent of the annual emissions of 28 low-income countries combined,” claims Friends of the Earth Scotland.

The campaigning group was outraged when Equinor and Ithaca won Government approval for Rosebank in September last year.

Opponents of Rosebank were cheered after Equinor said it might reconsider investing in UK oil and gas projects after Labour won the July general election on a pledge to introduce a ‘proper’ windfall tax.

Last week, however, the........

© Herald Scotland