DECC – FAWLEY OIL REFINERY – 26 April 2011

Dr Julian Lewis: In recognition of what the hon. Gentleman [Michael Connarty]  is saying, can I point out that the Fawley Exxon refinery in my constituency accidentally under-reported its CO2 emissions by one third of 1%? In accordance with the emissions trading scheme, as soon as it discovered what had happened, it reported it to the Environment Agency whereupon it was fined €1 million, which is more than some of the firms at fault in the Buncefield disaster are being fined. When a firm behaves responsibly and is punished for doing so under schemes that do not apply to other refinery companies in other countries, that does not constitute a level playing field.

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[Stephen Metcalfe: ... UKPIA, the trade association that represents the industry, has made a number of recommendations of which I am sure the Minister is aware. I do not propose to reiterate all of them, but I would like to make three broad points. First, refining is a global business. We are competing with China, India, Russia and the middle east, all of which can export to the UK and the EU, but are not under the same stringent environmental conditions as the UK industry. While in principle it is right and proper that the industry does what it can to reduce its environmental impact and emissions, we must recognise that it is competing in a global market. If we do not support the industry here, we might just move the environmental impact offshore and into countries that do not have the same extent of regulation.]

Dr Lewis: To illustrate that point further, may I point out that the Esso refinery at Fawley, in my constituency, has something called the combined heat and power unit that enables it to generate not only the electricity to run the plant, but steam, which is also of great value in the process? That has been exempt from taxation in previous regimes, but under a new proposal, that exemption will go. Once again we have a situation in which an uneven playing field is being made even more uneven.