Britain's cement industry is facing extinction unless the Government acts within months to stop the sector being buried by cheap imports, business leaders have warned.
The firms, which employ 89,000 people and form part of a UK mineral sector worth £6.7 billion a year, want ministers to level the playing field by taxing imported cement at the same rate as cement produced domestically.
The Government is consulting on doing this through a system known as the Carbon Border Adjustment Mechanism, or CBAM, but details remain under discussion despite a pledge to introduce it by January 1, 2027. British firms are currently subject to green taxes because of their heavy energy use, while foreign producers face no such levies. That has left UK cement makers at a disadvantage as they also contend with soaring energy costs and other taxes.
As a result, imported cement rose to 32 per cent of the market last year, up from just 12 per cent in 2008. Domestic production has fallen to 7.3 million tons a year, its lowest level since 1950 and down from a peak of 20 million tons in the 1970s.
Warning over housing and HS2
Industry bosses have called on the Government to reverse the decline, arguing that a reliable domestic supply is crucial to Labour's plan to build 1.5 million homes and to projects such as the HS2 rail line. They said relying on foreign imports puts this at risk because cement is bulky and difficult to transport by sea.
Last week, industry chiefs said they had received a "supportive" letter from Business Secretary Jonathan Reynolds, but added that it contained no firm commitment on when the Government would implement CBAM levies on imports.
Rob Wood, head of Breedon, which runs Britain's biggest cement works at Hope in Derbyshire, said: "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."
Government response
Reynolds recognised that the industry was "crucial to delivering new homes and nationally significant infrastructure projects." He confirmed that a timescale for implementing CBAM on imports would be "set out in the autumn," adding: "In addition, secondary legislation confirming details on monitoring, reporting and verification of emissions will follow in due course, with comprehensive guidance for businesses to be published later in the year."
He said the Government also planned a review of the eligibility criteria for the Energy-Intensive Industries Compensation Scheme, which helps UK firms cover the cost of cutting emissions.
But Wood said: "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."
Tory MP John Cooper said: "It seems crazy to shoot ourselves in the foot allowing cement production to be outsourced. The CBAM is complex, but solutions are what government is for."
Calls for a construction 'stimulus'
Cement bosses are also calling for a new stimulus to boost the industry, such as large-scale public construction projects. Wood said cement had also been hit by high energy costs and by National Insurance increases brought in by the previous Chancellor, Rachel Reeves.
He added: "Without a strong domestic cement business, building anything would be compromised."
James Brotherton, Breedon's chief financial officer, said: "If the last couple of years have taught us anything, overreliance on imports can be a big mistake."
Breedon's £150m investment
Wood contrasted his firm's investment with inaction by Whitehall. Breedon has spent £150 million at Hope since taking over the site in 2016, including £26.5 million to handle alternative fuels such as shredded tyres and waste, reducing the amount of coal burnt in its two kilns, where 29-metre flames heat raw materials to 1,450C.
"We've put our money where our mouth is," Wood said, pointing to what he described as civil service dithering.
The cement sector's problems are similar to those facing the steel industry. A Government spokesperson said: "We recognise the challenges, which is why our Supercharger scheme is cutting electricity costs for hundreds of our most electricity-intensive businesses, including Breedon. CBAM will ensure highly traded, carbon-intensive imported goods face a comparable carbon price to that paid by British companies producing the same goods, and we are focused on ensuring it is in place for January 2027."
