Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of the potential impact of carbon pricing on the refinery sector.

The UK ETS Authority provides free allocations to sectors at risk of carbon leakage, such as the refining sector, to reduce exposure to the carbon price. The Authority recently concluded a review into free allocation policy which confirmed refining is at risk of carbon leakage and will continue to be eligible to receive support through free allocation, measured against an efficiency standard. The review also determined that the efficiency standard used to set free allocations would be maintained in 2027, providing operators in the sector with the necessary certainty to plan for the forthcoming allocation period. This will provide continuity and additional time for industrial sectors to plan for future benchmark updates, which are expected in 2028. Ahead of this, the UK ETS Authority will perform an assessment of impacts on businesses, including those in the Refining sector.