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UK Energy Bill – What does it mean for cement?

World Cement,

As the government reveals its ‘Energy Bill’, it has made clear that energy intensive industries such as the cement sector may well be exempt from the ‘contracts for difference’, subject to state-aid approval that energy providers themselves will face.

There has been no comment yet on just which sectors will be exempt, but the initial outlook, at least, is positive; the government has acknowledged the important role that the cement industry has to play in the creation of the UK’s ‘low-carbon economy’. Such exemptions would be put in place to ensure that the UK’s industrial markets remain globally competitive. These measures, if not implemented, could well see energy intensive businesses relocating overseas once current licences expire.

At its core, the Energy Bill aims to remove the current dependency on fossil fuels for energy production, and integrate a greater array of alternative energy sources. Such as wind, nuclear and biomass. In order to meet emissions targets, the government hopes that enabling energy companies to charge more for domestic electricity will give them the investing power required to focus on greener energy sources. In turn, industries like cement can make use of greener energy to power its operations, whilst continuing with emissions reduction schemes that are already in place, such as fuel substitution for kiln firing.

In short, a greener cement industry is achievable without resorting to the kind of penalisation that could see the UK’s cement producers moving on to greener pastures. Time will tell.

Written by Jack Davidson.

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