The UK is facing a decline in domestic refining capacity, increasing its dependence on fuel imports. This vulnerability is heightened by geopolitical instability in the Middle East, making energy security a critical political priority. To protect domestic refiners, there are calls to expand the Carbon Border Adjustment Mechanism (CBAM) to include refined products. This policy aims to level the playing field by ensuring international competitors face similar carbon costs as UK producers.
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The push for CBAM on refined products is a classic move to stop carbon leakage. If the UK taxes domestic refiners but lets cheap, high carbon imports flood the market, you just export the emissions and kill the local industry.
True, but does this actually help the transition? Protecting refining capacity keeps us tied to crude. I would be more interested in seeing these protections tied to mandates for sustainable aviation fuel or bio-refining.
Basically saying we are losing refineries and need a carbon tax on imports to stop the bleeding. It is a survival play for the fuels industry, but the article is vague on how this fits into the actual net zero timeline.
The non fuel products mentioned, like chemicals for building, are the real worry here. If we lose that domestic base, the cost of materials for retrofits and insulation could spike because we are importing everything.
