UK Petroleum Industry Association                                                       

23rd May 2007

UKPIA’s response to Energy White Paper  

The Secretary of State for Trade and Industry presented to Parliament today the Government’s report “Meeting the Energy Challenge”, their White Paper on Energy, aimed at setting out policy and action to tackle climate change and provide the UK with clean, affordable and reliable energy in the future.

Chris Hunt, Director General of UKPIA, the trade association representing the nine main oil refining companies operating in the UK, commented. “We welcome the publication of the Government’s review of UK oil refining capacity ⁽²⁾, alongside the White Paper, which recognises the considerable value of refining to the UK economy and outlines the key challenges that it faces in meeting future changes in the demand mix and crude oil supply.”

He continued, “We are not short of refining capacity in the UK but we will need to re-balance the output from our refineries. This and addressing the other challenges outlined in the report, will require substantial investment. The delivery of this investment in the UK rather than overseas is influenced by Government policy, so the UK must remain an attractive place to do business, where decisions can be made with the confidence in the application of consistent, clear, long-term policy. We look forward to working with Government to address these challenges”.

The White Paper also outlined policy to reduce carbon emissions from the Transport sector. The industry is making the required investment and is working towards meeting the targets and timetable for the introduction of biofuels under the Renewable Transport Fuel Obligation (RTFO), starting in April 2008.

UK refineries already participate in the EU Emissions Trading Scheme (ETS) and the White Paper outlined Government plans to analyse whether road transport could be included in ETS by requiring fuel producers to hold carbon allowances to cover carbon emitted from the fuel they sell to consumers.

Chris Hunt commented: “We await the outcome of the Government’s analysis of this approach but have concerns over the potential complexity of such a scheme and the fact that it appears to be a change from a key principle of ETS, which is based on a system of ‘cap and trade’ on the emitters of carbon.”

Ends

Enquires to:     Nick Vandervell Tel. 0207 632 9880

Notes to editors:

 1.      UKPIA represents nine oil refining and marketing companies operating in the UK. They include:

BP, Chevron, ConocoPhillips, Esso, Ineos Refining, Murco, Petroplus, Shell and Total.

They also own approximately 2,200 of the UK's 9,382 service stations, and own and operate the nine crude processing oil refineries in the UK.

2.      Wood Mackenzie Review of Oil Refining Capacity May 2007. Energy White Paper support documents viewable by clicking here