Hollow words: Treasury decision to let down refineries risks closures

London, 20 March 2026 – Fuels Industry UK has warned that the Treasury’s refusal to include refined products in the UK Carbon Border Adjustment Mechanism (CBAM) from January 2028 could result in further refinery closures in the coming years. The decision not to deliver a CBAM now represents a serious and avoidable setback for one of Britain’s most strategically important industrial sectors.

In a letter received this week, the Exchequer Secretary confirmed that the Government will not progress with CBAM expansion for 2028, despite the sector meeting every test set by Treasury and Ministers having spoken about the importance of maintaining refineries.

Fuels Industry UK said the decision leaves the UK’s remaining four refineries exposed to unaffordable and growing carbon costs while higher-carbon imports continue to enter the UK market for free.

Elizabeth de Jong, CEO of Fuels Industry UK, said:

“Delaying CBAM and potentially not delivering it at all is not a neutral act. It increases the likelihood that Britain becomes 100% dependent on imported fuel over time. That is not a responsible position for a major economy especially at a time of global instability and geopolitical risk.”

“This decision is not a technical or timing problem - it is a political choice as the decision is solely in Government’s gift. By refusing to deliver a 2028 CBAM, the Treasury is knowingly increasing the competitive disadvantage faced by British refineries.”

“Ministers say they value energy security and the UK’s industrial base. Yet the one policy that would genuinely protect both - a CBAM from 2028 - has been delayed again and may not happen at all. We need to see tangible action from the Government that will secure our refineries’ competitiveness immediately.”