As the UK government on Monday published a call for evidence on the future of the country’s downstream sector, the Fuels Industry UK association called for urgent change in Britain’s policy to protect its four remaining refineries from extinction.
The UK’s Department for Energy Security and Net Zero launched today a call for evidence, aiming to publish a strategy for the downstream oil sector in the autumn of 2026.
The UK has been left with just four refineries, after two processing sites closed over the past year: the Prax Lindsey refinery in Lincolnshire and the Grangemouth refinery in Scotland.
Despite the critical role they play in the UK’s fuel supply and energy security, “refineries in the UK face challenges including: falling domestic demand; increased international competition from newer competitors in the Middle East, Asia and Africa; ageing infrastructure; high energy costs; and growing costs from carbon emissions that are hard to abate,” the government said.
The call for evidence is “a vital opportunity to meaningfully address the challenges of a sector currently being driven to the brink,” Fuels Industry UK, the representative body for the businesses supplying over 85% of the UK’s transport energy, said on Monday.
“With only four operating refineries remaining – the lowest number in modern history – the UK is becoming more exposed to global instability for both fuels and the many other products that are produced in the sector,” the association noted.
The industry body deplored the fact that the UK’s refineries pay up to £400 million, or $540 million, annually in carbon costs. In contrast, non-UK competitors often face no such pricing, “giving imports an unfair advantage across the supply chain.”
Fuels Industry UK recommends that the UK level the playing field and introduce a Carbon Border Adjustment Mechanism (CBAM) by January 2028 to ensure imports carry the same carbon costs as UK-made fuels.
“Without urgent policy action to create a level playing field, we risk exporting jobs and emissions and continuing to deindustrialise rather than decarbonise credibly,” said Elizabeth de Jong, CEO of Fuels Industry UK.
By Michael Kern for Oilprice.com