Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the potential impact of UK carbon pricing on the refinery sector; and whether her has made an assessment of the potential merits of carbon price linkage to the EU.

The UK’s refining capacity is very important to our energy security, resilience, as an industrial base to the continued growth of our regions. This government recognises the wider challenges facing the sector and know that tackling these together is vitally important.

Under the UK Emissions Trading Scheme, free allocations are provided to the refining sector to mitigate the risk of carbon leakage and reduce exposure to the carbon price.

Linking the UK ETS and EU ETS is expected to bring significant economic benefits to the UK, including a cheaper path towards decarbonisation by providing businesses with access to a larger, stable carbon market and creating the conditions for mutual CBAM exemptions, removing a major barrier to trade and lowering costs for UK firms.