MPA deeply disappointed at lack of government announcement on CBAM

This missed opportunity should be urgently followed by publication of the promised consultation response announcing introduction of a CBAM.

Failure to take this opportunity to demonstrate support for energy intensive industries – including cement – adds further uncertainty to the creation of a level playing field on carbon cost with overseas competitors, putting at risk domestic production and long-term investment in decarbonisation.

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 and supports skilled jobs across the country.

However, higher energy costs 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 that do not 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 imports. Maintaining fair competition for UK plants is essential to ensure a reliable source of domestically produced cement and avoid the challenges associated with international trading markets. A well-designed, watertight CBAM can help maintain a level playing field with international competitors and reduce the risk of carbon leakage to countries with less onerous climate policies.

A UK CBAM has also become more urgent following the establishment of the EU CBAM, and its full implementation 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: “The delay in committing to a CBAM sends the signal that the UK is not the place to invest. Cement is essential to our everyday lives. The construction of our homes, hospitals, offices 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. Levelling the carbon cost between domestic production and imports is vital to attract the investment required to decarbonise and ensure our long-term security of supply. The UK Government must urgently commit to a CBAM on cement.”

Read the article online at: https://www.worldcement.com/europe-cis/24112023/mpa-deeply-disappointed-at-lack-of-government-announcement-on-cbam/