Category: Gas Engineering Companies

Gas engineering firms operate in a rapidly changing energy system. The North Sea Transition Deal and the UK’s climate commitments mean companies must reduce emissions while maintaining energy security. At Apex Accountants, we help you navigate this transition by offering vital details about KPIs for gas engineering companies that are essential for tracking progress and planning investment. This guide uses the latest insights to answer the questions that gas engineering companies should be asking to successfully adapt to the net-zero future.

Why do gas engineering companies need KPIs for net‑zero?

The UK has committed to reduce greenhouse‑gas emissions by 68% from 1990 levels by 2030 and to achieve net‑zero by 2050. The North Sea Transition Deal (NSTD) sets sector‑specific targets – emissions from UK offshore oil and gas production must fall 10% by 2025, 25% by 2027 and 50% by 2030 compared with 2018. Companies that fail to plan for this transition risk higher costs, regulatory penalties and stranded assets. KPIs provide an evidence base for investment decisions and demonstrate compliance among investors, lenders, and regulators.

What is production efficiency, and how is it measured?

Production efficiency shows how well an operator turns installed capacity into output. The NSTA’s 2024 benchmarking dashboards, published in August 2025, report 75% efficiency in 2024. This figure compares actual output with potential output if facilities ran optimally.

Another KPI is the unit operating cost, the average cost to produce a barrel of oil equivalent (boe). In 2024, the UKCS unit cost was £19.49 per boe. Lower costs show efficiency. Rising costs may signal ageing assets or higher maintenance.

When tracking metrics for gas engineering companies, you should regularly check:

• Are our production efficiency and unit costs improving year‑on‑year?
• How do our metrics compare with NSTA benchmarks and industry peers?
• What capital expenditure is needed to maintain or improve efficiency?

How to track emissions intensity and methane leakage?

The NSTA’s Emissions Monitoring Report 2024 provides a baseline for emissions KPIs. Upstream greenhouse‑gas (GHG) emissions from UKCS operations fell 4% in 2023, contributing to a 28% reduction since 2018. However, emissions intensity – defined as kilograms of CO₂ equivalent per boe – rose from 22 kg CO₂e/boe in 2022 to 24 kg CO₂e/boe in 2023 because production declined faster than emissions. 

Most emissions come from power generation on offshore platforms (79%), while flaring accounts for 17% and venting 3%. Methane emissions intensity is also a key KPI; the UK average was 1 kg CO₂e per boe, far below the global average of 16 kg CO₂e per boe.

Key questions:

• What is our emissions intensity (kg CO₂e per boe) and is it declining?
• How do flaring and venting contribute to our emissions?
• Are we meeting methane intensity targets (e.g., the OGCI 0.2 % target)?

What does the North Sea Transition Deal mean for financial metrics?

The NSTD is a partnership between government and industry. It envisages investing £14–16 billion by 2030 in technologies such as carbon capture and storage (CCS), hydrogen and electrification. The deal also sets a voluntary target for 50% UK content in new energy projects and aims to cut 60 million tonnes of greenhouse gases, with 15 Mt coming from decarbonising production. 

For tracking metrics for gas engineering companies, this means CapEx planning must include electrification of platforms, offshore power-from-shore links, and early‑stage CCS infrastructure. KPIs should track capital spent on transition projects, returns on investment, and local content ratios.

How can hydrogen metrics inform the gas transition?

Hydrogen is critical to decarbonising energy-intensive sectors. The UK government now targets up to 10 GW of low‑carbon hydrogen production by 2030. Economic modelling suggests the hydrogen sector could support 30,000 direct jobs and contribute more than £7 billion in annual gross value added. To access support, projects must meet the Low Carbon Hydrogen Standard, which sets a threshold of 20 g CO₂e per megajoule (MJ) on a lower‑heating‑value basis. 

The first Hydrogen Allocation Round (HAR1) in early 2025 delivered an average price of £241 per megawatt‑hour (MWh) for electrolytic hydrogen; analysts believe costs must fall to below £100 /MWh to compete with natural gas. The Splitting the Difference report suggests that with supportive policies the cost of electrolytic hydrogen could drop below £100 /MWh.

Gas‑engineering firms should monitor:

• Hydrogen production costs per MWh and how they compare with natural‑gas prices.
• Compliance with the Low Carbon Hydrogen Standard.
• Number of hydrogen offtake agreements or supply contracts secured.

How much does carbon capture cost, and what are the investment implications?

CCS is touted as a key enabler for net‑zero, yet it remains expensive and unproven at scale. The Climate Change Committee’s Seventh Carbon Budget lowered the UK’s 2050 CCS requirement by 30%, but it still envisages capturing 73 million tonnes of CO₂ per year. An IEEFA analysis warns that CCS costs are spiralling. 

According to the CCC, the average abatement cost per tonne of CO₂ captured ranges from –£145 for electricity supply (reflecting cheaper renewables) to £349 for bioenergy with CCS (BECCS). The industry average is £184 per tonne. Engineered removals such as direct air capture (DACCS) and BECCS have per‑tonne costs of £323 and £349, respectively. The CCC estimates that £408 billion will be needed to install and operate CCS infrastructure by 2050, with annual spending of about £5 billion up to 2030 and £19 billion per year between 2031 and 2050.

For gas engineers, KPIs should assess:

• Cost per tonne of CO₂ captured versus carbon price or other abatement options.
• Capital allocation to CCS projects and the expected payback period.
• Percentage of emissions abated using CCS versus reductions achieved through electrification or efficiency.

What other financial KPIs for gas engineering companies are essential in the energy transition?

In addition to operational and environmental metrics, investors and lenders increasingly demand climate‑related financial disclosures. The IFRS S2 Climate‑related Disclosures Standard (effective June 2025) requires companies to report capital deployment towards climate risks and opportunities and to disclose their internal carbon price, including how it is used and the price per tonne applied. Gas‑engineering firms should therefore track:

• Capital expenditure on decarbonisation: How much of total CapEx is directed towards low‑carbon projects?
  
• Internal carbon price: What carbon price is used in project evaluation, and how does it compare with market prices?
  
• Return on invested capital (ROIC) for transition projects: Do low‑carbon investments deliver comparable or better returns than traditional upstream projects?
  
• Free cash flow and debt‑to‑equity ratios: Are investments increasing leverage, and is cash generation sufficient to fund decarbonisation?

These KPIs complement traditional metrics such as earnings before interest, taxes, depreciation and amortisation (EBITDA) margins, net profit margins, and reserve replacement ratios but integrate climate risks into financial planning.

How can accountants support gas engineers in achieving net‑zero?

Accountants play a pivotal role in bridging engineering data and financial decision‑making. Apex Accountants advises gas‑engineering businesses to:

1. Integrate production and emissions data into financial models: Use the latest emission factors – UK electricity carbon intensity fell 14.5% in 2025 versus 2024 due to reduced gas generation – to forecast the cost of electrification and power purchases.
   
2. Benchmark performance regularly: Compare financial KPIs for gas engineers against NSTA dashboards (production efficiency and unit costs), ONS emissions‑per‑head statistics (UK per‑capita emissions were 1.77 t CO₂e in Q1 2025) and CCC progress reports (territorial emissions were 413.7 Mt CO₂e in 2024, 50.4% below 1990 levels).
   
3. Scenario‑plan using different carbon prices: As carbon pricing covers about 28% of global emissions and mobilised over $100 billion in 2024, incorporate multiple carbon‑price trajectories in project appraisals.
   
4. Disclose climate metrics transparently: IFRS S2 requires disclosure of carbon targets, metrics, time horizons, and reliance on carbon credits. Ensure that financial statements articulate how transition risks could affect cash flows and cost of capital.

How Apex Accountants Help Track KPIs For Gas Engineering Companies 

The energy transition is reshaping the gas‑engineering landscape. Successful companies will measure, manage, and disclose the right KPIs. 

Production efficiency and unit operating costs show how well assets perform; emissions and methane intensity reveal environmental performance; hydrogen and CCS metrics indicate readiness for future energy systems; and financial indicators such as capital deployment, internal carbon pricing, and ROIC demonstrate resilience to regulatory change. By integrating these KPIs into strategic planning, gas‑engineering companies can not only meet regulatory requirements but also identify new opportunities in the journey to net‑zero.

Apex Accountants is ready to help your business collect and interpret these metrics, develop robust reporting frameworks, and align its financial strategy with the UK’s decarbonisation goals. Get in touch to turn data into actionable insights and drive your energy‑transition success.

The 100% First‑Year Allowance (FYA) on gas engineering innovations is an essential tax relief for businesses investing in qualifying assets. Businesses can immediately receive tax relief by claiming the full cost of certain new and unused assets in the year of purchase. The purpose of this allowance is to incentivise investments in sectors that align with government policy, particularly those that reduce carbon emissions and support the transition to sustainable energy sources.

For gas engineering businesses, FYA offers significant opportunities to claim tax relief on investments in infrastructure and equipment that drive the shift from fossil fuels to greener, low‑carbon alternatives. This includes plant and machinery used in gas refuelling stations, zero‑emission vehicles, and electric vehicle charging equipment. With the government’s commitment to decarbonisation, FYA plays a crucial role in supporting businesses within the gas engineering sector to advance environmentally friendly technologies while benefiting from immediate financial relief.

In the following sections, we’ll explore how businesses can claim the 100% FYA for gas engineering innovations, which gas engineering activities qualify for a 100% first‑year allowance, and the eligibility criteria that must be met. We will also outline how Apex Accountants can assist with navigating the complexities of this tax relief to ensure businesses maximise their claim and stay compliant.

What is the 100% first‑year allowance?

The 100% first‑year allowance (FYA) is a form of UK capital allowance that lets a business deduct the full cost of certain new and unused assets in the year the expenditure is incurred rather than spreading the deduction over several years. First‑year allowances are designed to accelerate tax relief and encourage investment in assets aligned with government policy.

For example, HMRC guidance explains that FYA lets commercial property owners claim up to 100% of qualifying asset costs in the year of purchase. Unlike writing-down allowances, which provide relief gradually, the FYA gives an immediate deduction from taxable profits, improving cash flow.

Why does the UK offer a 100% allowance on gas engineering innovations?

Government policy uses capital allowance for gas engineering companies to drive investment in clean transport and low‑carbon infrastructure. The list of assets eligible for the 100% FYA focuses on reducing emissions and supporting the transition to alternative fuels.

Streets Accountants notes that FYA encourages businesses to invest in plant and machinery. These assets reduce carbon footprints by improving energy and water efficiency.

Innovations in gas engineering drive the shift away from petrol and diesel. CNG, LNG, hydrogen, and biogas refuelling equipment support this transition. Governments incentivise these technologies to speed up adoption.

Which gas engineering activities qualify for a 100% first‑year allowance?

FYA is only available on new and unused assets; second‑hand equipment does not qualify.
Below is a non‑exhaustive list of qualifying categories relevant to gas engineering and low‑carbon transport. These items must not be bought to lease to other people or used in a residential property

Plant and Machinery for Gas Refuelling Stations

FYA covers infrastructure for gas, biogas, and hydrogen refuelling. Examples of qualifying assets include storage tanks and pumps used in gas refuelling stations. Additionally, infrastructure such as CNG (compressed natural gas) refuelling stations, LNG (liquefied natural gas) storage/dispensing systems, and hydrogen refuelling stations are eligible for FYA. Similarly, biogas production and refuelling equipment qualify for this allowance as well.

Zero-Emission Goods Vehicles

New zero-emission vans and lorries, such as battery-electric vehicles, are eligible for 100% FYA. This provides a significant tax incentive for businesses transitioning to greener fleet options. These vehicles must be new and unused to qualify.

Electric Cars with Zero CO₂ Emissions

HMRC guidance specifies that electric cars with zero carbon dioxide emissions are eligible for the First Year Allowance. It’s important to note that second-hand electric cars do not qualify for FYA, as the allowance is only available for new vehicles.

Equipment for Electric Vehicle Charging Points

Equipment installed at business premises to charge electric vehicles (EVs) qualifies for FYA. This includes the installation of chargers for EVs, making it easier for businesses to contribute to the growing network of green transport infrastructure.

Plant and Machinery in Special Tax Sites

Companies investing in plant or machinery for use in designated Freeports or Investment Zones are eligible for 100% FYA. These zones offer enhanced tax relief, encouraging businesses to invest in particular geographic locations.

Plant and Machinery Used in Ring-Fence Oil and Gas Exploration

Oil and gas companies in the UK and the UK Continental Shelf can claim 100% of qualifying plant and machinery costs in the year incurred. This targeted initiative supports UK energy production.

These are just a few examples of the many plant, machinery, and infrastructure assets that qualify for the 100% First Year Allowance, designed to encourage businesses to invest in energy-efficient and zero-emission technologies. If you’re planning to invest in these assets, it’s a good idea to consult with a tax advisor to ensure compliance with the relevant guidelines and maximise the potential tax relief.

Important exclusions:

• Assets must be new and unused; used or second‑hand equipment does not qualify.
  
• FYA cannot be claimed when the same expenditure is already covered by annual investment allowance (AIA), full expensing or the 50% special rate FYA.
  
• Purchases made to lease out to other people or for residential lettings do not qualify.
  
• The enhanced 100% allowance for energy‑saving plant and machinery on the Energy Technology List ended on 1 April 2020; however, the ETL still provides useful information on energy‑efficient equipment.
  

Who can claim the 100% allowance?

Any business (company, partnership or sole trader) incurring qualifying expenditures on the assets mentioned above can claim the allowance, subject to the following conditions:

• The claimant must be carrying on a trade and buying the asset for it.
  
• The asset must be new, unused and not acquired for leasing or domestic lettings.
  
• For vehicles, only zero‑emission goods vehicles and new electric cars qualify.
  
• Ring‑fence oil and gas companies can claim FYA for plant and machinery used in exploration or extraction.

In addition, companies subject to corporation tax may prefer to use full expensing for main‑rate plant and machinery acquired after April 2023, which also provides a 100% deduction. However, the gas refuelling assets listed above qualify specifically for FYA. They offer flexibility when businesses exhaust AIA limits or operate outside a company structure.

How to claim the 100% first‑year allowance – step‑by‑step

1. Identify qualifying assets: Confirm that the equipment falls into one of the eligible categories listed above and that it is new and unused.
   
2. Keep accurate records:Retain invoices, contracts, and evidence showing the asset’s type, purchase date, and cost.
   
3. Decide on the appropriate allowance: For some assets you may have a choice between FYA, AIA or full expensing. Remember, you cannot claim more than one allowance for the same expenditure.
   
4. Calculate the claim: The FYA allows you to deduct 100% of the qualifying cost from your profits. If claiming the full amount would result in a trading loss, you can claim less than 100% and write down the remainder using the standard writing‑down allowances.
   
5. Include the claim in your tax return: FYA is claimed as part of your corporation tax or self‑assessment tax return. You should maintain supporting documentation in case HMRC requests evidence.
   
6. Seek professional advice: Rules for capital allowance for gas engineering companies change frequently. A specialist accountant can help maximise your claim and ensure compliance.
   

Examples of qualifying expenditure

The following examples illustrate how gas engineering innovations can benefit from the FYA.

• Hydrogen refuelling station: A logistics company builds a hydrogen refuelling point for its fleet. The project includes installing storage tanks, pumps and dispensing equipment. HMRC guidance confirms that plant and machinery for gas refuelling stations—including hydrogen refuelling equipment and storage tanks—qualifies for the FYA. The company can deduct the entire cost in the year of purchase.
  
• Compressed natural gas (CNG) depot: A bus operator invests in a CNG refuelling depot with CNG compressors, storage vessels and filling nozzles. HMA Tax notes that CNG refuelling infrastructure and LNG storage/dispensing systems qualify for FYA. This allows the operator to recover the full expenditure against taxable profits.
  
• Zero‑emission goods vehicles: A wholesaler replaces diesel vans with electric delivery vans. New zero‑emission goods vehicles are specifically listed as qualifying assets. The wholesaler can claim 100% of the cost in the first year, improving cash flow.
  
• EV charge point installation at a freeport: A business located in a UK Freeport installs EV charge points for its staff vehicles. Plant and machinery used in a special tax site qualifies for FYA. The company can claim 100% of the installation cost.
  
• Exploration equipment for oil & gas: An oil‑and‑gas company buys drilling rigs and pumps for exploration in the UK continental shelf. HMRC research states that businesses in exploration or extraction deduct 100% of qualifying plant and machinery costs in the year incurred.

Latest updates and developments (2024‑25)

• Full expensing becomes permanent: From April 2023, “full expensing” allows companies to deduct 100% of the cost of new and unused main‑rate plant and machinery. In 2025, this relief will remain in place, operating alongside the FYA, AIA, and 50% special rate allowance. Businesses must choose the most beneficial relief for each asset.
  
• Super‑deduction and 50% special‑rate FYA ended: The temporary super‑deduction (130%) and the 50% special‑rate allowance applied to expenditure between April 2021 and March 2023. They have been replaced by full expensing and the permanent 50% first‑year allowance for special‑rate assets (e.g., integral features like lifts or HVAC).
  
• Decarbonisation investment allowance reduced: Under the Energy Profits Levy, investment in decarbonising oil and gas production attracted an 80% allowance until October 31, 2024. From 1 November 2024 the rate falls to 66%. This decarbonisation allowance is separate from the FYA but may be relevant for oil and gas businesses making low-carbon investments.
  
• Energy-saving FYA abolished: The enhanced FYA for energy-saving plants and machinery on the Energy Technology List ended on 1 April, 2020, for companies, although businesses can still use the ETL as a procurement tool for energy-efficient equipment.
  
• AIA remains at £1 million: The annual investment allowance, available to most businesses, continues to provide 100% relief for qualifying expenditure up to £1 million. FYA can be claimed in addition to AIA, but not for the same expenditure.
  

How does FYA interact with other allowances?

There are several capital allowance routes. Choosing the right one depends on the asset type and the business’s circumstances:

• Full expensing (companies only): 100% deduction for new main‑rate plant and machinery. This policy does not apply to second-hand assets or cars.
  
• Annual investment allowance (AIA): 100% deduction on the first £1 million of qualifying plant and machinery each year. This applies to both new and second-hand assets.
  
• 50% first‑year allowance (special‑rate pool): For new special‑rate assets (e.g., integral features). 50% is deducted in year 1, and the remainder goes into the special rate pool at 6%.
  
• Writing‑down allowances: Used when expenditure exceeds AIA or when FYA is not available. Rates are 18% for main‑rate assets and 6% for special‑rate assets.
  

FYA is often used when businesses have exhausted their AIA or want to preserve the AIA for other expenditure. For companies, full expensing may provide the same benefit, but FYA remains valuable for gas refuelling plant, zero‑emission vehicles and ring‑fenced oil & gas assets where full expensing may not apply or where assets are not main‑rate.

Why claim the 100% first‑year allowance?

• Immediate cash‑flow benefit. The entire cost is deducted from taxable profits in year one, freeing up capital for reinvestment.
  
• Encourages greener investment. By targeting zero‑emission vehicles and gas refuelling infrastructure, the FYA supports the UK’s net‑zero and clean‑transport goals.
  
• Flexibility for ring‑fence trades. Oil and gas businesses can accelerate the write‑off of exploration plant.
  
• Works alongside AIA and full expensing. The FYA can be used when other allowances are exhausted or less efficient.
  
• Enhanced ESG credentials. Investing in clean refuelling infrastructure signals a commitment to environmental, social, and governance goals.

How Apex Accountants can help

At Apex Accountants we specialise in navigating the complexities of capital allowances. We can:

• Review your assets to ensure gas refuelling equipment and zero‑emission vehicles qualify for FYA.
  
• Maximise your claim by coordinating FYA, AIA, full expensing and other reliefs.
  
• Prepare tax computations and evidence to support your claim and handle HMRC queries.
  
• Advise on future investments so that your business benefits from the latest allowances and remains compliant.

The capital allowances landscape is evolving rapidly. Businesses investing in gas engineering innovations today can enjoy significant tax savings, but careful planning is essential. Please contact our team to discuss how the 100% first‑year allowance can support your gas engineering innovations.

Gas engineering businesses in the UK often miss out on key corporation tax reliefs that could lead to significant savings. Staying informed about available reliefs can drastically reduce tax liabilities, leaving more funds to reinvest in business growth and innovation. Here, we explore seven often-overlooked corporation tax reliefs for gas engineering businesses. This guide ensures you make the most of every opportunity to lower your tax burden.

7 Ways To Reduce Your Corporation Tax Bill With Tax Reliefs 

1. Research & Development (R&D) Tax Credits

Gas engineering businesses investing in technological advancements may qualify for Research & Development (R&D) tax credits. As of 1 April 2024, the R&D Expenditure Credit (RDEC) allows companies to claim up to 16.2% of eligible R&D expenditure. Whether you’re developing new gas systems, improving energy efficiency, or integrating advanced materials, your R&D efforts could be eligible for this generous relief.

Utilising R&D tax credits helps businesses offset the costs of innovation, stimulating further research and development activities, ultimately benefiting the bottom line.

2. Patent Box Relief

If your gas engineering business holds patents related to innovative gas technologies, you could benefit from the Patent Box regime. The relief allows profits derived from patented inventions to be taxed at a reduced rate of 10%. It can significantly lower your effective tax rate on profitable patented products. This offers a major incentive for businesses that rely on intellectual property as part of their operations.

3. Capital Allowances

Capital allowances are a valuable relief for businesses investing in qualifying assets such as machinery, equipment, or vehicles. The annual investment allowance (AIA) offers up to £1 million in 100% relief on qualifying expenditures. Additionally, full expensing allows businesses to claim 100% tax relief on new and unused plant and machinery, reducing the amount of taxable profits.

Gas engineering companies that invest in equipment like drilling rigs, compressors, or testing equipment can claim these allowances, reducing upfront tax costs.

4. Energy Profits Levy (EPL) Reliefs

The Energy Profits Levy (EPL) applies to companies operating in the oil and gas extraction sectors. While the headline tax rate increased to 38% from 1 November 2024, businesses involved in low-carbon investments can still access the decarbonisation investment allowance at a reduced rate of 66%.

If your business is engaged in energy transition activities or carbon capture initiatives, you may be eligible for reliefs under the EPL that help offset the cost of investing in greener technologies, making it more cost-effective to meet environmental standards.

5. Enterprise Investment Scheme (EIS)

The EIS provides a tax-efficient way for businesses to raise capital, offering investors relief from income tax of up to 30% on investments up to £1 million per year. For gas engineering businesses at the start-up or expansion stages, this scheme can be an excellent tool for attracting investment.

Not only do investors benefit from significant tax relief, but they are also exempt from capital gains tax on profits from their shares if held for at least three years, making this an appealing option for both companies and investors.

6. Energy Tax Relief Schemes For Gas Engineering Companies 

Gas engineering businesses can benefit from various energy-related tax relief schemes. For instance, the Climate Change Levy (CCL) exemption provides a significant discount on energy bills for businesses reducing their energy consumption. Companies engaged in energy-efficient practices or carbon reduction may receive discounts of up to 41% on electricity bills and an additional 6% on gas bills.

By integrating energy-saving technologies, your business can benefit from tax relief for energy use while also supporting your sustainability efforts.

7. Decommissioning Relief

For businesses involved in decommissioning gas infrastructure or equipment, the decommissioning relief offers substantial tax savings. Costs associated with the removal, disposal, or decommissioning of oil and gas assets can be deducted from taxable profits, reducing your corporation tax liabilities.

This relief is particularly important for gas engineering businesses engaged in projects such as the removal of old pipelines or gas plants, enabling you to offset the significant costs involved in these processes.

How We Can Help Optimise Corporation Tax Relief For Gas Engineering Businesses 

Gas engineering businesses have access to several tax relief options that can reduce their corporation tax liabilities. By utilising these reliefs, businesses can increase cash flow, reinvest savings in growth, and improve financial performance.

However, navigating these schemes can be complex. At Apex Accountants, we specialise in helping businesses like yours identify and maximise the tax reliefs available and find practical ways to reduce your corporation tax bill. Our experts and comprehensive corporation tax services guide you through the process, ensuring you make the most of these opportunities and stay compliant with HMRC regulations.