Fuels Industry UK: Spring Statement a Lost Opportunity to Secure UK Energy Security and Net Zero Transition

Following today's Spring Statement, Fuels Industry UK has expressed significant disappointment at the Chancellor's failure to use the statement to provide progress on the inclusion of refined petroleum products in the UK Carbon Border Adjustment Mechanism (CBAM) by January 2028.

Despite a commitment in the November 2025 Budget to consider the sector's inclusion, Treasury has failed to set out a clear implementation roadmap, which leaves the UK's remaining four refineries struggling with the growing carbon cost burden on the sector that saw two sites close in 2025.

The industry has been clear that a January 2028 implementation is vital to align with a scheduled step-change in carbon costs. In early 2028, the sector expects Emissions Trading Scheme (ETS) compliance costs to double from recent averages to over £500 million across the sector per year and will continue to grow.

Without the level playing field provided by a CBAM, these rising costs risk making UK refining commercially unviable.

"The evidence for our inclusion in the UK CBAM is already on the Chancellor's desk. Today was a lost opportunity to turn the 2025 Budget's 'commitment to consider' into a 'commitment to act'.

"For our members, this ongoing silence from Treasury is a worrying signal. It risks pushing the timeline for 2028 implementation beyond the point of no return – we need to see greater urgency. With average refinery carbon costs potentially doubling or more in the next few years, the window to secure thousands of high-skilled jobs and the £11 billion in annual exports this sector provides is closing. We need a decision by the end of March to ensure the UK remains an investable proposition".

ENDS

Notes for editors:

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.”