UK cement sector urges domestic procurement preference, carbon cost reform

The UK's Mineral Products Association has called on the government to favor British-made cement and other domestic construction materials in major public projects, arguing that local supply is critical to meeting housing and infrastructure targets while supporting industrial resilience.

The call, at a June 30 parliamentary reception, comes as UK cement producers face mounting pressure from energy costs and carbon policy charges, with climate and energy policies now costing the sector a combined GBP82 million, nearly double the GBP45 million recorded in 2015, the association said in a statement July 2.

The association also called for continued backing for carbon capture and storage in cement, saying the technology could reduce sector emissions by 75% by 2035, and cut construction emissions by up to 3.8 million metric tons/year of CO2.

The MPA said the cement industry remains excluded from the Energy Intensive Industries Compensation Scheme, leaving domestic producers exposed to energy prices significantly higher than those faced by overseas competitors.

Cement is fundamental to delivering the housing, clean energy projects and transport networks required for economic growth, member of parliament Henry Tufnell said. "Domestic materials production is increasingly a matter of national security and resilience."

Martin Casey, senior director for cement and lime at the MPA, said public procurement should prioritize domestic industry to drive innovation and secure jobs, noting that the UK has the raw materials and manufacturing capability to meet domestic demand.

"We can't build without cement," Casey said. "Using domestically made materials doesn't just power growth, it supports resilience and security of supply."

The association said these costs include network charges and direct and indirect expenses from policies such as the UK Emissions Trading Scheme and Carbon Price Support, which it said is not expected to be removed until 2028.

Despite those financial pressures, the cement and concrete industries have cut emissions by 63% since 1990, the MPA said.

Concerns also remain over the design of the UK's incoming Carbon Border Adjustment Mechanism, wherein gaps in the policy could fail to fully equalize carbon costs between domestic producers and imports, potentially encouraging carbon leakage, the MPA said.

The UK CBAM is scheduled to launch Jan. 1, 2027, initially covering imports of aluminum, cement, fertilizer, hydrogen, iron and steel. The mechanism is designed to apply a carbon price to covered imports comparable to that faced by UK manufacturers.

Non-EU cement imports into the UK reached a 10-year high in March, official figures showed, a trend the association attributed to product diversion following the start of the EU CBAM charging phase earlier this year.

"Cement is a productive, growth-generating industry," Casey said. "We need to back this kind of sector and create the conditions for it to thrive, not push it to the brink."

Casey said a decarbonized UK cement industry could support the country's construction targets, but said government action was needed to create "fair, stable conditions" for long-term investment.

Platts, part of S&P Global Energy, assessed clinker CBAM premium at $21.33/mt July 2, up 32 cents/mt week over week.