Delayed UK carbon border tax risks undermining domestic cement makers: industry association

The UK's delayed implementation of its Carbon Border Adjustment Mechanism may create a competitive disadvantage for domestic cement manufacturers as the EU's CBAM enters full operation, potentially diverting higher carbon imports away from EU markets toward Britain where no border carbon costs apply, Diana Casey, executive director for energy and climate change at the Mineral Products Association (MPA), said in a Jan. 22 statement.

The EU's CBAM is now fully implemented, while the UK's equivalent legislation is not due to take effect for nearly another year. This delay allows imports to bypass the EU's carbon tariffs and enter the UK market without a border carbon charge, creating an uneven playing field.

"Without action, there's a real danger that domestic cement manufacturers, who are already facing a host of competitiveness challenges, risk being priced out of the market," Casey said.

The EU's CBAM, which became fully operational in 2025, imposes steep default carbon values on importers unable to provide verified emissions data. This pricing structure creates incentives for cement exporters to redirect shipments from EU markets to the UK, where no equivalent carbon border charges are in place until the British system launches in 2026, Casey said.

Casey urged the government to monitor imports closely and prepare for swift action if a surge occurs.

"The government needs to keep a close eye on imports this year -- preferably committing to transparent tracking and information sharing -- and be ready to act quickly if increases occur," Casey said.

Flaws in UK's proposed system

Casey also stressed the need to ensure the UK CBAM is fit for purpose when it arrives, to deter those considering sending cement with potentially higher carbon content to the UK.

"While we await the introduction of the UK CBAM, we need to iron out some kinks in the armor, making sure that it's fit for purpose when it arrives," Casey said.

The competitive imbalance is compounded by the UK's exclusion of cement from Energy Intensive Industries (EII) compensation, despite the sector meeting eligibility thresholds. Casey noted that cement and hydrogen are the only CBAM-covered sectors denied this support, leaving domestic producers at a further disadvantage against imports.

"To solve this issue, the government urgently needs to make cement eligible for compensation to avoid output dropping further than it already has -- in 2024, domestic production fell to a 75-year low," Casey said.

The UK government plans to exclude indirect emissions from its CBAM scope until January 2027, creating additional cost disparities. While the EII scheme was designed to offset this exclusion for eligible sectors, cement's omission leaves producers exposed to costs that importers can avoid.

Further, as it stands, the UK's policy will apply a single charge to each CBAM sector, making no distinction among products whose embodied carbon and trade exposure vary significantly. If the charge isn't set correctly, it won't match the cost paid by domestic producers or the prices paid by importers to the EU.

"The government should use 2026 as a trial run period, continuing to collaborate with the industry, so it can ensure its rate-setting methodology works," Casey added.

Another major concern, Case said, is the UK government's plan to use default values, based on a global average, when verified emissions aren't available. By definition, this would allow half of imports to underpay for the embodied carbon of their products.

"Given the high defaults applied by the EU CBAM, the playing field wouldn't be levelled, and there would be little incentive for importers to measure, report, or reduce their carbon impact," Casey added. "When it comes to CBAM and EII compensation, the government needs to make a choice. It can either plug the gaps in its plans or leave the cement sector exposed to competitors not paying the same costs," Casey said.