Oil Refining Sector

Debate between Katie White and Matt Western

Thursday 11th December 2025 Westminster Hall

[Katie White]

I am glad that the right hon. Gentleman intervened, as I was going to come on to his points—in particular, his interesting point about the national interest. I say to him gently that I feel we are working in the national interest, but the national interest includes energy security as well as respecting the science of climate change, which is happening. As he is the Father of the House, I genuinely listened to his points, but I was a little disappointed—[Interruption.] He can laugh all he likes, but I listened to his points. He talked about the UK being responsible for less than 1% of emissions. That is the case in terms of nation states, but I think the UK’s impact in the world is so much larger, whether through people following our policy decisions, the impact of our banking sector or our consumption of goods, which has also come up a lot.

We are looking at how we manage the transition, and we want to do it in a way that respects the science, but I am also competitive about where Britain can take advantage of these industries. We want to make sure that we have these industries, including the wind turbines that the right hon. Gentleman mentioned, but we also want to look at how we can make the transition justly and fairly. I will come on to that later in my speech.

Last month, the UK ETS Authority confirmed that current benchmarks will stay in place for the 2027 scheme. That decision gives refineries and other energy-intensive industries the certainty that they need. By maintaining those benchmarks, we are providing stability and breathing space, helping businesses plan, manage costs and prepare for future changes to the scheme.

We are also reviewing compensation for energy-intensive industries. We announced in the autumn Budget that we are assessing the feasibility of including refined products in the carbon border adjustment mechanism, so that imported goods face an equivalent carbon price and the sector’s efforts to decarbonise will not be undermined by carbon leakage. This is the refining sector’s top priority, which the Government are committed to exploring as one of several levers to support the sector’s long-term future. These measures demonstrate our commitment to supporting investment, driving innovation and ensuring that the refining sector remains competitive and resilient as we transition to a low-carbon economy.

Looking ahead, the Government are taking further steps to secure the long-term future of the UK refining sector and to ensure a just transition. The Department for Energy Security and Net Zero has established a dedicated team to work across Whitehall and with industry. A number of Members asked about working across Whitehall; we will continue to do that, to ensure that we maximise the impact. This will guide how we manage the transition, protect energy security and support jobs and local communities.

We will continue to engage closely with the fuel industry to identify practical measures that can strengthen the sector. That is why, in June, we convened the first ministerial—[Interruption.]

[Matt Western (in the Chair)]

Order. Can I have a certain decorum from other Members while the Minister is speaking?

[Katie White]

Thank you, Mr Western.

That is why, in June, we convened the first ministerial roundtable with the refining industry in more than a decade, providing a clear signal of our commitment to partnership and dialogue. As announced in the autumn Budget, we will shortly launch a call for evidence to inform the UK’s long-term strategy for the downstream oil sector. That will seek industry views on the opportunities and barriers to transition, the risks facing the sector and the types of support needed to deliver and manage a competitive transition. These actions underline our determination to work hand in hand with industry. I thank the Scottish Affairs Committee for its recent report, and my hon. Friend the Member for West Dunbartonshire (Douglas McAllister) for sharing it.

The refining sector has faced long-standing challenges, and recent closures underline the scale of change. Petroineos’s decision to end refining at Grangemouth was disappointing. As my hon. Friend said, while the difficulties there were well known, there was no Government plan in place before we took office. Within weeks of doing so, we worked with the Scottish Government to put together a £100 million package to support the community and invest in the local workforce, along with tailored support to secure good alternative jobs. When we came into government, there was no overall plan for Grangemouth from either the SNP or the Tories. We have put one in place.

We are committed to securing Grangemouth’s long-term industrial future. We are working closely with the Scottish Government, the Office for Investment and Scottish Enterprise to attract future investment and transform the area into a clean energy and sustainable technology hub. This effort is already delivering results. We have received over 100 inquiries to date, and the investment pipeline is supported by the £14.5 million in funding announced at the Budget, alongside the National Wealth Fund’s £200 million for co-investment opportunities at Grangemouth.

Today, I can confirm that, along with the Scottish Government, we have made £3 million available for MiAlgae, an innovative biotechnology company that produces sustainable omega-3 rich products, which will create over 130 direct jobs at the site and 310 jobs across Scotland over five years. These steps demonstrate our commitment to a managed transition by supporting communities, attracting investment and ensuring that sites like Grangemouth—

[Matt Western (in the Chair)]

Order. The Question is—