Written question WQ100753

Welsh Government remains committed to net zero and recognises the importance of ensuring industry are supported through any associated challenges. I visited Valero on 20 August and understand the concerns they have raised regarding competitiveness and carbon leakage. Valero plays an important part in supporting employment, supply chains and economic activity not only in South West Wales but across Wales, contributing to UK fuel supply an energy resilience.

As part of the UK ETS Authority, I am assured that free allocation will continue to apply to sectors at risk of carbon leakage, such as refining, that are not currently covered by the UK Governments Carbon Border Adjustment Mechanism (UK CBAM). We will continue to work across the Authority to ensure the concerns raised by Valero are reflected in policy development.

I am also aware of the strength of feeling and rationale the sector has put forward for the inclusion of refined fuels within the UK CBAM. Whilst it is a reserved policy, we actively engage with the UK Government to ensure that decisions made in respect of the UK CBAM take into account the decision-making powers of the Authority on free allowances.

I will continue to engage with UK Government on issues affecting Welsh industry, including the long-term competitiveness, resilience and decarbonisation of strategically important industrial sites in Wales.