The UK’s four remaining oil refineries risk “sleepwalking into decline” if punitive carbon taxes aren’t eased, the sector’s industry body has said.
Today’s King’s Speech, which set out parliament’s priorities for this session, saw several references to energy security and resilience, including an increased focus on nuclear and renewables, but made no mention of domestic oil refining, which the industry says is being seriously hampered by carbon taxes.
Fuels Industry UK has previously warned the country’s four remaining refineries are “operating with one hand tied behind their back” due to a tax regime that forces them to pay £400m a year to ‘offset’ the carbon they emit – a tariff not applied to foreign refineries, which can undercut domestic facilities as a result.
Elizabeth de Jong, chief executive of the trade body, says that while the government “is right to put energy security and sovereign capability at the heart of its agenda”, it is “not consistently applying that focus”.
de Jong repeated her calls for a Carbon Border Adjustment Mechanism that would see imported refined products hit with tariffs to level the playing field, adding: “The UK has an opportunity to secure our own fuels for the long term and ensure we can continue producing some of the lowest‑carbon fuels in Europe.”
