Another Tough Month for the UK’s Refining Sector: Policy Gaps Put Energy Resilience at Risk
London – 10 December 2025
Fuels Industry UK has warned that recent Budget announcements have failed to provide the clarity and immediate support needed to safeguard the UK’s remaining refineries and the skilled jobs they underpin.
The UK has already lost one-third of its refineries in the past year. Without urgent action, the remaining four sites face the same pressures: higher carbon and energy costs than competitors abroad, and growing uncertainty over long-term policy.
Despite positive signals that the Government is considering refined fuels for inclusion in a UK Carbon Border Adjustment Mechanism (CBAM), no concrete decision has been made. The sector cannot wait years for CBAM to take effect without change in the meantime.
Key concerns from the last month include:
- Lack of CBAM clarity: The Budget’s recognition of refining’s role in our economy is positive, but without a firm commitment to include refined fuels, the UK risks falling further behind international competitors. Refineries need certainty now to plan investment and maintain operations.
- Exclusion from industrial support schemes: The new British Industrial Competitiveness Scheme (BICS) appears to exclude refineries, despite being designed to lower energy costs for heavy industry. This omission leaves the sector exposed to some of the highest industrial energy prices in the world.
Elizabeth de Jong, Fuels Industry UK Chief Executive Officer, commented:
“Refineries are closing because the UK is now one of the highest-cost places in the world to operate. Recent announcements have done nothing to change that. Without urgent and meaningful action, the UK risks losing more refineries — and with them the growth, skills, industrial base and energy resilience they provide.”
“We need a clear commitment on CBAM, immediate interim measures to address carbon costs now, and access to industrial energy cost reduction schemes. Without this, the UK’s refining base — and the security it provides — will continue to erode.”
ENDS
Notes for Editors:
- Fuels Industry UK represents the companies that manufacture and supply over 85% of the UK’s transport fuels, investing in sector-wide transformation to help the country reach net zero. That includes conventional and lower carbon alternative fuel suppliers alongside terminal and pipeline operators.
- Member companies have invested over £9 billion in the UK over the last ten years and employ 100,000 people across the UK sector in highly skilled, productive and well-paid jobs. The sector collected over £37 billion of fuel duty and VAT in 2024, with £11 billion of products exported globally.
- The November Budget (26/11) contained the following statement on refineries:
“3.65 The government recognises that refineries play a role in energy security and the UK’s industrial base, and will publish a call for evidence on the fuel sector. The government is also considering the feasibility and impacts of including refined products in the Carbon Border Adjustment Mechanism (CBAM) in future.”