Oil Refining Sector

Lee Anderson Excerpts

Thursday 11th December 2025 Westminster Hall

[Lee Anderson (Ashfield) (Reform)]

It is a pleasure to serve under your chairmanship, Mr Western. Of course, we have been here before with industry in this country. I remember what happened to the coal mines back in the 1980s. I worked in the coal mines in Nottinghamshire and Derbyshire, and the whole industry was decimated by the Conservative Government at the time—

[Sir Edward Leigh]

You were a Conservative once!

--- Later in debate ---

[Matt Western (in the Chair)]

Order.

[Lee Anderson]

If the right hon. Gentleman wants to intervene, he is more than welcome.

What the Government did not realise at the time is that when they got rid of a coalmine—each coalmine had a football team, a rugby team, a cricket team, a community club, a miners’ welfare, a brass band and a bandstand in the local welfare grounds—it destroyed whole communities, and those communities will never come back. They will never be the same again.

Fast forward 40-odd years and we have a Labour Chancellor and Government, who we would think would protect these industries. Look at the hypocrisy in that part of the world. We have Drax power station, which used to burn coal from a nearby coalmine, just a few miles down the road. I think that was shut about 10 years ago. I remember the Energy Secretary at the time was campaigning to keep it open. How things have changed! The power station now burns wooden pellets from trees chopped down in North America—in Canada. They chop the trees down and put them on diesel-guzzling cargo ships. They then chop them up into pellets using diesel-guzzling machinery on the ship. They then come to this country, are put on diesel-guzzling cargo trains and transported to Drax power station, where we set fire to them. And we say that is renewable energy. That costs the British taxpayer about £1 million a day in subsidies. I think it has cost about £10 billion so far since we have been using wooden pellets there.

Just a few miles down the road we have the perfectly good Lindsey oil refinery, which appears to be doomed, with 400 jobs at risk and a thousand more in the supply chain. If the Government are going to use taxpayers’ money to subsidise industry or keep places open, they should look at the oil refineries, because once they have gone, they are never coming back, and we have lost the community and that sense of pride.

There are not many Government Members here, to be honest—I cannot see many—although I will thank the hon. Member for Alloa and Grangemouth (Brian Leishman) for his passionate contribution. I did not catch most of it because I am a little bit deaf; I will sit a bit closer next time.

[Brian Leishman]

I don’t know what you mean. [Laughter.]

[Lee Anderson]

We would expect this Labour Government to do a little bit more for these communities. Back in the ’80s, Labour was attacking the Tories for doing exactly the same thing: closing the vital industries. As I say, once the industry has gone, it is gone, and the skills that one generation passes on to another are gone as well. It is all well and good saying to somebody, “It’s okay, you can make windmills or solar panels,” or, “We’ll retrain you in green energy,” but they do not want that. This lot do not understand that there are still men and women in this country who want to get up in the morning and go do a proper day’s graft. They want to set the alarm clock at 10 o’clock at night, get up at half four or five o’clock in the morning and go do a proper day’s graft where they get their hands dirty. It is dangerous, dirty work, and they contribute towards their society by earning decent wages—good wages—and it keeps their communities going. If we lose that, we lose it for ever.

In the last year alone, we have lost a third of refineries, following the closure of Grangemouth, and now Lindsey is obviously doomed as well. That leaves just four refineries in the country. Why is Lindsey closing? Because it is being hit again and again with costs just to stay compliant with the UK emissions trading scheme. We know that to be compliant, refineries are required to submit verified emission reports to the UK ETS authority and to surrender sufficient allowances to meet the total emissions generated. As the hon. Member for Brigg and Immingham (Martin Vickers) said, those costs account for the highest expenditure in a refinery’s operating budget. Just let that sink in: the biggest cost to a refinery is one that has been inflicted upon it for the sole purpose of meeting net zero. In other words, it has been inflicted by this Government and the Energy Secretary.

[Seamus Logan]

I hear what the hon. Member says about oil refineries, and I share many of his concerns—you will have heard what I said—but I have also heard him and his party colleagues talking about “net stupid zero”. Does he actually believe that we should cancel all the wind farm projects and all the grid infrastructure rebuilding? Is that what he firmly believes we should do?

[Matt Western (in the Chair)]

Order. I remind Members that when they say “you” they are speaking to me.

[Lee Anderson]

I have heard colleagues talk about “net stupid zero” in the past. We think the targets should be scrapped; we are not against trying different sources of energy to fuel our nation. We are saying we should have a sensible transition. China has got it right: it is burning coal. China is opening coal mines and using coal-fired power stations. The irony is that China makes solar panels and windmills using electricity generated by coal-fired power stations, and then flogs them to us. We think, “That’s great! Look at this: we’re reducing the Earth’s carbon.” We are not reducing the Earth’s carbon; we are just exporting it to other countries. It is absolute madness and hypocrisy. When we are committing this nonsense, it costs our Treasury billions of pounds in receipts a year. It is absolute nonsense. When some of my hon. Friends say “net stupid zero”, that is what they are referring to. And it is stupid—it is absolute madness.

I am going to finish now, because I have had an extra minute and I know other people want to speak. I have been one of those working men who gets up in the morning at 5 o’clock and goes and does a dirty, horrible, dangerous job. I know what it is like to come home, after doing a horrible shift on a horrible job. I know what the people in these communities feel like. They do it because they love their family and their community, so they go and do some jobs that nobody in this room would ever do. This Labour Government should remind themselves what the Labour party was founded on: helping the working man in this country.

--- Later in debate ---

[Luke Taylor (Sutton and Cheam) (LD)]

It is a pleasure to serve under your chairship, Mr Western. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this important debate, and all the Members who have spoken for their contributions. I declare an interest as the chair of the all-party parliamentary group for the future of aviation, travel and aerospace—we have done a lot of work on sustainable aviation fuel—and that I met representatives of Exolum, the International Air Transport Association, LanzaJet and the Tank Storage Association in preparation for this debate.

At times of great upheaval and change, it is tempting to look to political leaders, artists or other major cultural figures to get a sense of where the world is headed. That is certainly a popular approach among historians, but I think it misses something: the often pivotal role of engineers—and I say that not just because I am one myself, or was. It is not necessary to subscribe to an entirely materialistic view of history to recognise that engineers, no matter who they work for or where they work, are often at the vanguard of the kind of technological change that enables our wider political or social ambitions to be achieved. That was true at the cusp of the industrial revolution; it was true when the white heat of technology exploded the middle class in the ’50s; and it is true now, perhaps more than ever, as we embark on the mission to undo the damage to our environment that previous technological shifts have wrought. We must secure our energy supply so that we can withstand an ever more uncertain future, and transform our late-industrial malaise into a green, prosperous and abundant economy through a truly just transition.

Data from the oil and gas industry shows that it directly supports around 26,000 jobs across the UK and indirectly supports 95,000 more. These are largely jobs in offshore drilling, rigging, catering, scaffolding, onshore fabrication yards, anchor manufacturing and vessel maintenance, and there are more. It is also estimated that there are another 84,000 jobs among the hospitality workers, taxi drivers and others who serve industrial communities and are supported by them in turn. We have seen before what happens when there is a major industrial shift and we fail to support jobs and the communities they help to keep alive—from the closure of the pits to the ongoing crisis of British Steel. We must learn lessons from past deindustrialisations to avoid similar damage to communities today.

All policy makers should dedicate themselves to avoiding the traumatic manifestations of necessary—or, at the very least, foreseeable—moments. It is vital that any job losses in this sector are mitigated by reskilling and retraining with new green investment. However, right now in 2025, we are losing our traditional refining, chemicals and existing biofuel production capability and home-grown expertise. Complexity, departmental misalignment and a lack of pragmatism in public policy are holding back the existing and future fuels sector. The Government have the power to solve those things. I hope that today we can suggest and agree some constructive next steps.

Earlier this year, Liberal Democrat colleagues and I recognised the importance of the Government’s Sustainable Aviation Fuel Bill. Sustainable aviation fuel, or SAF, will be one of the main enablers of aviation’s transition from polluting liquid fossil fuels to a future of hydrogen, battery and hybrid zero emission power plants. As part of that transition, SAF has a huge role to play in creating new green jobs and delivering on our energy security goals.

Local production creates jobs, improves resilience, reduces import dependence and stabilises prices, but without efficient resource allocation and strategic investment, future refinery closures could create severe supply bottlenecks and undermine our energy independence. It is equal parts encouraging that there is consensus among the serious political parties in this country about the need for transition and energy security, and concerning that from different ends of the spectrum, the Greens and Reform are either wilfully ignorant or unwilling to accept that supporting the oil refining industry to transition is critical.

The Greens seem willing to turn their back on any of the major technologies involved in the just transition of our fossil fuel infrastructure. They are locked into the pursuit of an ideological purity that sees those companies and producers solely as the problem and not as part of the solution. Reform’s static, stagnant and staggering belief that net zero is either bound to hurt working people or just bad in and of itself, only gives them the self-satisfied and smug smile of someone who thinks they know all the answers, but that could not be further from the truth.

[Lee Anderson]

The hon. Member talks about hurting working people. Does he not agree that the closure of the oil refineries hurts working people?

[Luke Taylor]

I completely agree. That is why we are talking about a transition. It may well bring shivers to the hon. Member’s spine to talk about transitions, but it is critical that we talk about them in a reasonable and sensible way, and about how we look forward to the future rather than to the past. Reform’s approach is equally dogmatic and damaging as that of the Green party and has already been found wanting in practice in local government.

We can only make the transition a reality if we grasp the opportunity to utilise our existing oil refining infrastructure to turn to the chemistry of the future, with a diverse set of feedstocks from a wide range of supply points. We should be working with industry on delivering that, but industry leaders tell me that on the critical steps that the Government should be taking, they are going ignored or unheard.

Let us take bioethanol, for example. At the start of 2025, the UK bioethanol sector provided 895 million litres of renewable fuel production capacity and thousands of direct and indirect jobs. It was also a significant market for British agriculture and providing critical co-products such as carbon dioxide for the NHS, and for the food and drink sector. As of December 2025, the industry has been halved, following the US-UK trade deal.

An immediate solution would be to transition that bioethanol to SAF, as the alcohol-to-jet technology being developed in the UK can convert it into jet fuel. Under the SAF mandate rules, however, bioethanol readily produced in the UK—sustainable enough for a car engine—has been deemed not sustainable enough for a jet engine. Will the Minister consider the request of industry to support the UK’s bioethanol industry to continue operations and simultaneously support SAF production by allowing bioethanol use under the SAF mandate? The upcoming call for evidence on the role of crops under the UK SAF mandate should be released urgently, and a pragmatic approach taken.

Similarly, opening hydrogen storage subsidies to include liquid fuel infrastructure would ensure that existing assets could play a role in the hydrogen economy. Hydrogen storage is critical, but hydrogen production and usage are also critical to our future renewable goals and to providing the supply of SAF that will be required to decarbonise aviation. DFT rules state that, to make compliant SAF in the UK, hydrogen must be green hydrogen—rightly—and cannot be supported by the hydrogen production business model, a scheme established by DESNZ to get UK hydrogen production off the ground. That alone is not controversial. However, there is no green hydrogen available in the UK that will not be supported by the HPBM, which means that a portion of SAF using these renewable molecules will be uncompliant and, essentially, very expensive fossil jet fuel, despite it actually being green. I convey to the Minister the ask from industry that the DFT and DESNZ should be urgently working together to ensure interconnectivity with hydrogen policy and SAF policy, so that SAF producers are not penalised for using domestic industry?