Government plans for Carbon Border Adjustment Mechanism welcomed by MPA
The Mineral Products Association (MPA) has welcomed plans announced today by Chancellor Jeremy Hunt to level the carbon cost playing field between UK cement production and imports, by introducing a Carbon Border Adjustment Mechanism (CBAM) by 2027.
The UK cement and concrete sector – represented by the MPA - provides a secure, domestic supply of essential materials to build the infrastructure needed for a low carbon future, and makes a vital contribution to UK GVA, supporting skilled jobs across the country.
However, higher energy and historically higher carbon costs compared to international competitors are undermining UK cement production. This is contributing to an increasing share of the UK cement market being supplied from other countries without a need to account for its carbon impact.
MPA has been calling for a CBAM covering cement as a method of equalising carbon costs between domestic producers and importers. Maintaining the competitiveness of UK plants is essential to ensure a reliable source of domestically produced cement and avoid the vagaries of the international trading markets. A well designed, watertight CBAM can help level the playing field with international competitors.
Alongside the CBAM, MPA says it is vital that energy intensive industrial sites, like those in the cement sector, are supported by enabling Government policy and business models for carbon capture use and storage, to decarbonise and grow the market for domestically produced low carbon products.
A UK CBAM has also become more urgent following the establishment of the EU CBAM, which is due to start charging in 2026. This creates a risk of significant volumes of imports, that currently go into the EU from non-EU producers without effective carbon pricing, being diverted to the UK unless a similar mechanism is put in place.
Dr Diana Casey, MPA’s Executive Director for Energy and Climate Change said: “Cement is essential to our everyday lives. Our homes, hospitals, schools and much more depend on it. We cannot take its supply for granted and neither can we put ourselves at risk of unstable international trading markets. That is why today’s commitment to a UK CBAM is so important. Levelling the carbon cost between domestic production and imports will help the UK attract the investment required to decarbonise and ensure our long-term security of supply. The Government’s commitment to bring in the UK CBAM by 2027 is very welcome and ideally it should be introduced in 2026 to align with the EU scheme. This is the only way to prevent any detrimental impact of the EU CBAM on UK industry.
“As well as a CBAM on cement, MPA would be interested in exploring a CBAM on lime. However, the challenge for the lime sector is ensuring that lime exports can compete in international markets.”
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The difference in climate ambition globally has resulted in a significant carbon cost differential across different countries. Cement producers in the UK are paying a premium in direct and indirect carbon costs (e.g. resulting from climate change related policy costs passed on in energy bills) compared to those of competitors overseas, where there is far lower ambition to reduce emissions. This difference means that competitors in those less ambitious countries can produce cement far more cheaply and export it to the UK without having to pay the carbon costs.
About the Mineral Products Association:
The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and industrial sand industries. With the merger of British Precast, and affiliation of the British Association of Reinforcement (BAR), the British Calcium Carbonate Federation, the Cement Admixtures Association (CAA), CONSTRUCT, Eurobitume, MPA Northern Ireland, MPA Scotland and the UK Quality Ash Association (UKQAA), it has a growing membership of 520 companies and is the sectoral voice for mineral products. MPA membership is made up of the vast majority of independent SME quarrying companies throughout the UK, as well as the 9 major international and global companies. It covers 100% of UK cement and lime production, 90% of GB aggregates production, 95% of asphalt and over 70% of ready-mixed concrete and precast concrete production. In 2021, the industry supplied £22 billion worth of materials and services to the Economy. It is also the largest supplier to the construction industry, which had annual output valued at £178 billion. Industry production represents the largest materials flow in the UK economy and is also one of the largest manufacturing sectors.
