UK Carbon Pricing Cripples Refineries, Report Says: Import Dependence and CBAM Exclusion Raise Questions

UK carbon pricing is pushing domestic refineries out of business, according to a report by energy consultant Kathryn Porter discussed on the Energy News Beat podcast. With only four refineries left, the country relies heavily on imported diesel and jet fuel, creating supply chain vulnerabilities. The report argues that the UK Emissions Trading Scheme taxes refineries without driving real decarbonization, while other sectors can pass costs to consumers. A key contradiction highlighted is the exclusion of refineries from the Carbon Border Adjustment Mechanism (CBAM). That means imports face no carbon cost, so domestic production gets penalized while overseas competitors with weaker environmental rules gain an advantage. The result is offshored emissions and deindustrialization, not lower global CO2. The discussion also touches on UK gas market misconceptions and broader policy failures. The full report recommends abolishing the ETS for refineries. For anyone following carbon policy and industrial competitiveness, this episode lays out the risks of pricing carbon without a border adjustment that actually covers trade-exposed industries.