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Investing.com -- The UK oil refining industry faces a potential complete shutdown if carbon costs continue to rise without similar requirements for international competitors, according to Exxon Mobil Corp., operator of the country’s largest oil-processing facility.
During a parliamentary hearing Wednesday, Exxon’s UK Chairman Paul Greenwood described the situation as "an absolute catastrophe waiting to happen," warning that all UK refineries will eventually close down "if you continue to have increasing carbon costs and your competitors don’t."
Greenwood urged that refining should be included in the carbon border adjustment mechanism (CBAM), which places charges on imported goods produced under less stringent environmental standards. He emphasized that Exxon is "not asking for money from the government," but rather seeking "parity" with international competitors.
The warning comes after two UK oil refineries have already ceased operations this year, partly due to high costs and competition from facilities in Africa and Asia.
When questioned about the UK’s refining investment climate, Greenwood described it as "absolutely not fertile" and "barren." He also noted that the UK lacks the necessary framework to support cleaner hydrogen production, adding that the Solent Cluster initiative at Fawley has "been and gone."
Greenwood suggested that if the UK fails to act on CBAM, it should consider an emergency suspension of CO2 costs in refining to preserve the industry.
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