Reducing the carbon footprint of the refining and downstream oil sector, and supporting an orderly transition to a low-carbon economy, will require big changes to the way our industry operates.
Securing the right policies necessary to enable market solutions and secure investment in new technologies is key to achieving these necessary outcomes.
Essential to achieving a meaningful strategy for the future will be the creation of an environment where industry can adapt, deliver and thrive, getting the nation’s energy policy right, recognising the strategic value of the downstream oil sector, today and in years to come, and realising a secure energy future through a clear, stable and well-designed legal, fiscal and regulatory framework.
A long-term strategic vision: Crude oil needs to be converted into the usable products we rely on in our everyday lives and refineries, somewhere, are required to process it. However, whilst the downstream oil sector plays a leading role in powering the UK’s economic engine, and is critical to the nation’s energy security, mobility and economic growth, it has been notably missing from previous industrial strategies’ considerations and continues to be absent in discussions and pronouncements on energy policy. Yet the UK’s energy security of supply and economic performance will greatly benefit from maintaining the health of the sector. For this reason, the UK's long-term industrial strategy needs to recognise the value of this strategic industry, today and in years to come, and create the right environment for it to be able to deliver and thrive.
An industrial and energy strategy which prioritises competitiveness and sustainability: A sound industrial strategy for the UK must prioritise competitiveness and sustainability and be based on clear guiding principles, including a competitive free market operating within a clear, stable and well-designed legal, fiscal and regulatory framework that best serves the interests of consumers, suppliers, investors, and local communities alike, with respect to economic prosperity, energy security and environmental protection. If such a framework is lacking, it not only discourages investments but disadvantages domestic manufacturing with respect to other world regions with which our industries compete. This, in turn, has the potential to further erode our energy resilience, industrial fabric and subsequent opportunities for employment and growth. It is also essential that the industrial strategy for the UK ties in with all government departments’ jurisdictions and objectives in order to create a broad and coherent vision for success. A sound strategy for the future must also tie in with the jurisdictions of local, regional and devolved governments in order to produce consistent and pragmatic results.
Growth: Regulatory predictability helps create an environment that favours investment and growth. It is essential that industry is able to compete on a level playing field with EU and other global actors and that policies refrain from distorting the market. As part of a strategy for growth, regulatory impact assessment must be used as part of policy design to identify impacts of planned action and avoid unintended consequences. Further, the application of the Regulator’s Code must be fully enforced and monitored to avoid negative impacts on regulated businesses and hence the prospects for economic growth.
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