Chris Hunt - UKPIA director general

04 May, 2016
Page 7 

The competitiveness of oil refining and other energy intensive industries is under threat. The current crisis facing UK steelmaking is symptomatic of a much wider malaise, mirrored across the whole major industrial manufacturing infrastructure. In exploring the challenges facing oil refining and wider industry in the UK, UKPIA has produced a report entitled Crisis What Crisis? This communication not only provides a wide-angle overview of why the manufacturing industry matters but, through a refining sector case study, sets out the pressures undermining its competitiveness. In summary, the report shows that our energy intensive industries, such as refining, play a significant role in the economy but are at a critical stage and face a number of significant challenges, the outcome of which will have a profound impact on long-term economic growth and the nation's resilience.

UK refineries operate on a global basis and face, among other pressures, strong international competition from countries with markedly lower industrial energy costs and, most crucially, a legislative background that severely disadvantages them against EU and global competitors.

Now more than ever, as the competitiveness of industry is under severe threat, government has a critical role in recognising the sector's current and future contribution and in maximising its potential and productivity. In particular, the cumulative impact of unsustainable environmental costs and other regulations, which for UK refineries is currently estimated at 11.3bn by 2030, must be thoroughly reviewed, as well as the ability of our industry to compete in international markets on a level playing field. Our industry competes globally and it requires a level playing field in policy terms to enable it to succeed. The critical question now is whether or not the necessary steps will be taken to ensure that industry's competitiveness is maintained. A balance between environmental aspirations and a growing and thriving industry can be achieved and will be essential in ensuring that the UK retains its oil refining base, together with its quality employment and environmental progress versus global competitors.

For more information on the report, visit

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