Contribution
It is a pleasure to serve under your chairmanship, Mr Western. I have really enjoyed the debate, which has been full of passion and emotion. I heard the anger, including in what my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) said, but I also heard that there is a lot of commonality in some of our values and on the transition that we are trying to achieve together. I have genuinely enjoyed listening and I have noted lots of points. There were a lot of questions; I will endeavour to get through them, but if I do not, we may need to follow up in writing to hon. Members.
I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this important debate, and I am grateful to all hon. Members for their contributions. This is a timely opportunity to discuss a matter of strategic significance for our nation’s energy security: the future of the UK refining sector. The industry has helped to underpin our economy and our resilience for decades, and its future deserves our full attention. The Minister for Energy is in Grangemouth today, and I will say more about that later.
Our refineries play a crucial role in ensuring a stable supply of the essential fuels that keep our transport networks running, our industries operating and consumers supplied with the energy they rely on every day. The sector is more than just a fuel; it drives growth in key sectors, supports thousands of skilled jobs in communities and sustains supply chains for chemicals, plastics and manufacturing. Refineries also play a critical role in the wider downstream oil sector. The Humber refinery in the constituency of the hon. Member for Brigg and Immingham is the UK’s only source of anode-grade petroleum coke, which is essential for electrical vehicle production. The Fawley refinery contributed to the global covid-19 response by supplying the specialist halobutyl rubber used to seal vaccine vials.
Importantly, UK refineries are also investing in their own future through decarbonisation and diversification by deploying carbon capture or producing low-carbon fuels to support our transition to net zero. Demand for refined products will continue, even beyond 2050, and the UK’s refineries will remain essential for hard-to-abate sectors such as heavy industry, aviation and maritime. That is why, as my hon. Friend the Minister for Energy made clear in June, the Government are absolutely committed to securing the long-term viability of the UK’s refining sector, and, as set out in the autumn Budget, we are reviewing critical policies to address the challenges that the sector faces.
Those challenges are real. In the 1970s, the UK operated 18 refineries; today, as has been said many times during the debate, only four remain. Falling demand for traditional fuels, global competition from mega-refineries in the middle east, India and Africa, changing trade dynamics and ageing assets all put pressure on UK operations. But with challenge comes opportunity, and the Government are determined to seize the opportunities by driving innovation, supporting investment and ensuring that the refining sector continues to play a vital role in our economy and for our energy security for decades to come.
The Government have already taken significant steps to support the refining sector and the wider fuel sector, and we are committed to do more. We have driven the shift to low-carbon fuels through the renewable transport fuel obligation, and this year we went further with the sustainable aviation fuel mandate, backing cleaner fuels for aviation. The Humber refinery already produces SAF at commercial scale, while Fawley and Stanlow are among the projects backed by our advanced fuels fund, which provides grants to accelerate the next generation of transport fuels. Refineries are playing a key role in driving the UK SAF industry forward, strengthening energy security with a home-grown supply. We are also de-risking investment in SAF production through the revenue certainty mechanism. We are working with industry to cut emissions through carbon capture and low-carbon hydrogen at major clusters such as Viking and HyNet. We will set out a clear plan for industrial decarbonisation to keep the UK competitive.