The United Kingdom's cement industry is on the brink of collapse, with business leaders warning that a failure to act within months could lead to its extinction. The sector, which employs 89,000 people and contributes £6.7 billion annually to the UK economy, is struggling to compete with a surge in cheap imports that do not face the same environmental tax burdens as domestic production.
Industry executives are calling on the government to implement a Carbon Border Adjustment Mechanism (CBAM) to level the playing field. This mechanism would tax imported cement based on its carbon emissions, mirroring the green taxes that UK firms already pay due to their high energy consumption. While the government has pledged to introduce CBAM by January 1, 2027, details are still under discussion, and industry chiefs are concerned about the timeline.
"We need the CBAM at the start of next year. The EU has one, we don't. Without that level playing field, there won't be a domestic industry," stated Rob Wood, CEO of Breedon, which operates Britain's largest cement works at Hope in Derbyshire. Foreign producers currently avoid the carbon levies applied to domestic manufacturers, placing UK firms at a significant disadvantage, especially amid soaring energy costs and other taxes.
The impact of this disparity is evident in market share. Imported cement accounted for 32 percent of the UK market last year, a stark increase from just 12 percent in 2008. Concurrently, domestic production has fallen to 7.3 million tons annually, its lowest point since 1950, down from a peak of 20 million tons in the 1970s.
Industry leaders argue that a robust domestic cement supply is vital for the UK's infrastructure goals, including the government's plan to build 1.5 million houses and major projects like the HS2 rail line. They warn that overreliance on imports could jeopardize these plans, given that cement is a bulky material difficult to transport efficiently by sea.
Business Secretary Jonathan Reynolds acknowledged the industry's importance for new homes and infrastructure. He confirmed that the timeline for CBAM implementation would be detailed in the autumn, with secondary legislation and business guidance to follow. The government also plans to review eligibility criteria for the Energy-Intensive Industries Compensation Scheme to aid UK firms in covering emission reduction costs.
However, cement bosses express urgency. "The industry is on its knees. The Government has committed to a CBAM by the end of the year and now needs to deliver on its commitment," Wood added. He highlighted Breedon's investment of £150 million at the Hope works since 2016, including £26.5 million for alternative fuel systems, as evidence of the company's commitment to sustainable production. "We've put our money where our mouth is," Wood commented, contrasting their investment with perceived inaction from government departments.
Concerns echo those seen in the steel sector, where similar challenges of import competition and energy costs have arisen. The government stated it recognizes these challenges and highlighted its Supercharger scheme, which aims to reduce electricity costs for highly energy-intensive businesses, including Breedon. The CBAM is intended to ensure imported carbon-intensive goods face comparable carbon pricing to domestic products, with a focus on its implementation by January 2027.
Industry figures also called for additional government stimulus, such as large-scale public construction projects, to bolster demand. The sector has been impacted not only by high energy prices but also by National Insurance increases. "Without a strong domestic cement business, building anything would be compromised," Wood asserted. James Brotherton, Breedon's chief financial officer, cautioned that overreliance on imports can be a significant risk, a lesson learned in recent years.
