UK Aims to Reduce Carbon Expenses for Refineries Following Shutdowns

The UK government is developing a plan to safeguard its remaining oil refineries from increasing carbon prices, following the closure of two facilities.

On Monday, the Department for Energy Security and Net Zero will request input to shape its Future of Fuels strategy, which is set to be released later this year.

The government aims to integrate refining into its UK Carbon Border Adjustment Mechanism, which will levy fees on imports of products with lower environmental standards.

In the last 18 months, two UK oil refineries, Grangemouth in Scotland and Prax Lindsey in North Lincolnshire, have shut down.

Exxon Mobil Corp., which runs the largest oil-processing plant in the country, has cautioned that the industry could vanish entirely if carbon costs keep rising.

Earlier this month, Energy Secretary Ed Miliband stated that he is collaborating with the Treasury to expedite the inclusion of refineries in the CBAM. Minister for Energy Michael Shanks met with industry representatives on February 4 and encouraged them to provide feedback during the call for evidence.

"Unlike previous administrations that have accepted a decline and failed to engage, we are committed to supporting this sector," Shanks said in a statement.