Britain's cement industry faces potential extinction if the government does not implement measures within months to counteract cheap imports, according to business leaders. The sector, which employs 89,000 people and contributes £6.7 billion annually to the UK economy, is urging ministers to level the playing field by taxing imported cement at rates comparable to domestically produced materials.
The government is currently consulting on a Carbon Border Adjustment Mechanism (CBAM) that could address this issue, but details remain under discussion despite a pledge for its implementation by January 1, 2027. British firms are currently subject to green taxes due to their high energy consumption, a burden not shared by foreign competitors. This, coupled with soaring energy costs and other domestic taxes, places UK cement manufacturers at a significant disadvantage.
As a result, imported cement has captured a substantial portion of the market, rising to 32 percent last year from just 12 percent in 2008. Domestic production has consequently fallen to 7.3 million tons annually, the lowest point since 1950 and a steep decline from its peak of 20 million tons in the 1970s.
Industry executives argue that a stable domestic supply is essential for the government's plans to build 1.5 million houses and for major infrastructure projects like the HS2 rail line. They also highlight that relying on foreign imports poses risks, given cement's bulky nature and the challenges of long-distance sea transport.
While industry chiefs have received a 'supportive' letter from Business Secretary Jonathan Reynolds, it reportedly contained no firm commitment on the CBAM's implementation timeline. Rob Wood, head of Breedon, which operates the UK's largest cement works, emphasized the need for the CBAM by early next year, stating, "Without that level playing field, there won’t be a domestic industry." Reynolds acknowledged the industry's importance for housing and infrastructure, indicating that specific CBAM implementation details would be "set out in the autumn," with further legislation and guidance to follow. He also noted plans to review eligibility for the Energy-Intensive Industries Compensation Scheme.
However, industry leaders stress the urgency, with Wood stating, "The industry is on its knees." Cement bosses are also advocating for additional measures, such as a 'stimulus' through large-scale public construction projects. High energy costs and previous tax increases have further impacted the sector. Breedon has invested £150 million at its Hope facility since 2016 to adopt alternative fuels and reduce coal use, demonstrating a commitment to domestic production despite what they describe as government inaction.
The government has stated that its Supercharger scheme is reducing electricity costs for intensive businesses, including Breedon, and reiterated its commitment to having CBAM in place for January 2027 to ensure imported goods face comparable carbon pricing.