MPs from four political parties sign joint letter to the Chancellor on refined products inclusion in CBAM
London, 23 April 2026 – Seven MPs from four political parties have signed a joint letter to the Chancellor asking her to reconsider the decision not to include refined products in the UK Carbon Border Adjustment Mechanism (CBAM) from January 2028.
The failure to include refineries in the CBAM in 2028 was announced by the Exchequer Secretary in a letter received in March, despite the sector meeting every test set by Treasury and Ministers having spoken about the importance of maintaining refineries.
The decision not to include the sector in the CBAM means that UK refineries will continue to pay carbon taxes here that other refineries globally do not have to pay – meaning there is not a level playing field due to policy.
The decision represents a serious and avoidable setback for one of the country’s most strategically important industrial sectors. It risks further refinery closures by leaving them 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:
“It is important that politicians from across the country and across the political spectrum are speaking up about the need to protect refineries from unfair carbon costs with a CBAM. Exclusion risks further refinery closures and at worst the UK becoming entirely dependent on imported fuel at a time of unprecedented global instability and geopolitical risk.”
“This is a political decision and the Treasury is knowingly increasing the competitive disadvantage faced by our remaining refineries. Ministers say they value energy security and the UK’s industrial base, but now we need urgent action."
ENDS
Notes for editors:
- Refineries are included in the UK Emissions Trading Scheme (UK ETS) – a carbon tax levied on industry, aviation and power businesses in the UK. This requires them to surrender “allowances" for their emissions during the year with income received by the Government.
- The current price of each allowance is ~$70/Tonne CO2 (available here). Government provides further information on the UK ETS here.
- The UK ETS means that the UK refining sector incurs as much as £400m costs per year (2022 figure at peak to date, with average in recent years of £200m) on their carbon emissions. Many overseas refineries, for example in the US Gulf Coast, the Middle East and India, do not have to pay equivalent carbon taxes.
- Fuels Industry UK models that changes to the UK ETS in coming years could see the remaining 4 refineries collectively incur carbon costs of £400m in 2028 and £600m in 2030 increasing the risk of further refinery closures.
- 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.”
MP signatories:
- Sir Desmond Swayne MP (near Fawley Refinery)
- Euan Stainbank MP (near former Grangemouth Refinery)
- Graham Leadbitter MP (SNP Energy lead)
- Henry Tufnell MP (Pembroke Refinery)
- Sir Julian Lewis MP (Fawley Refinery)
- Martin Vickers MP (Humber Refinery and former Lindsey Refinery)
- Sarah Pochin MP (Stanlow Refinery)
Read the letter here: Joint Letter Inclusion Of The UK Refining Sector Within The CBAM From 2028