The UK fuel industry is urging the government to take immediate action in the upcoming Budget to protect domestic refineries from a looming £200 million carbon tax. This tax poses a significant threat to the viability of UK refineries, which are crucial for converting crude oil into essential products like petrol and jet fuel. Without intervention, the industry warns that the UK could see a further decline in refining capacity, jeopardising energy security and increasing reliance on imported fuels.
Five UK refineries have already closed since 2005, with two more set to shut down in 2025. The remaining refineries are under pressure from high energy costs and competition from countries that do not impose similar carbon taxes. This situation has led to ‘carbon leakage,’ where cheaper, imported fuels are produced with higher emissions, undermining the UK’s environmental goals.
The government plans to introduce a Carbon Border Adjustment Mechanism (CBAM) to level the playing field for UK producers, but refineries have not yet been included in this scheme. Industry leaders stress that the upcoming Budget must reflect the government’s previous commitments to support the refining sector, which is vital for national resilience and job security.
As Parliament reconvenes, the fuel industry is calling for concrete steps to ensure that UK refineries remain competitive and capable of meeting domestic fuel demands. The outcome of this Budget could have lasting implications for the UK’s energy landscape and economic stability.
Source: GB News
