The EU’s Carbon Border Adjustment Mechanism (CBAM) is now up and running, with the UK’s set to follow in January 2027. But the misalignment between the two poses an existential threat to cement manufacturers. With the clock ticking on the UK policy, question marks remain over whether the government can iron out the creases in time, securing the nation’s materials supply and the future of a foundational industry vital for achieving government ambitions on housing, clean energy and infrastructure.
The government opened its second UK CBAM consultation last month, giving manufacturers the opportunity to make their voices heard on the proposed levy. The intention behind the policy is good, aiming to level the carbon cost of products imported into the UK so that overseas producers pay the same for their emissions as domestic businesses. In the case of cement, a watertight CBAM could pave the way for industry to thrive, supporting decarbonisation and allowing us to reap the economic benefits of using British-made cement – a key ingredient in concrete and therefore a vital piece of the construction supply chain.
But as it stands, there is a real risk that the policy won’t achieve what it’s been set out to do. We have less than a year to make sure it works.
For UK cement, this is where the path splits. There’s a future where a strong CBAM helps to prevent the offshoring of emissions and underpins a sector that creates economic value and provides skilled, well-paid jobs with good working conditions and tenure. Or there’s a future where weak legislation threatens to push the industry closer to the cliff edge and undermines the UK’s ability to get things built. With some added clarity and adjustments to the legislation, we can head down the right track.
Capitalising on the benefits of British cement
There are clear incentives for ensuring the future of domestic production. From ambitious housebuilding targets to the Infrastructure Pipeline, construction activity is due to step up a gear in the coming years and the government will need a reliable supply of cement to avoid falling short of its targets. Why expose the UK to volatile global supply chains when we have the power to be self-sufficient?
Levelling the playing field with a strong CBAM would make sure the sector can continue investing in decarbonisation too. Our Mineral Products Association data shows that UK concrete and cement are decarbonising faster than the UK economy, slashing emissions by 63% versus 1990 levels. A poorly adjusted CBAM could open the door to imports with potentially higher levels of embodied carbon and undermine this progress.
It would also be a step backwards for the government’s productivity drive. Cement – as well as delivering significant value in terms of tax revenue – is one of the most productive industries in the country, with the average worker generating £191,000 in value every year. That’s nearly three times the national average. Not only are they productive, these manufacturing roles are also well-paid. Getting CBAM right isn’t just good for industry, it’s good for working people too.
Cement already faces a host of competitiveness challenges, including high industrial energy, labour and regulatory costs. We simply can’t afford to get this policy wrong and add yet more to the burden.
Tightening our approach and testing the waters
So the incentive for a robust CBAM is clear. How do we deliver it?
First, we need to see more nuance in how costs for imports will be calculated. The draft policy sees a single charge applied to each sector. However, since the trade exposure and embodied carbon of products within a CBAM sector can vary significantly, the policy may not work in practice. If the charge isn’t set correctly, it won’t match the cost paid by domestic producers or the prices paid by importers to the EU, which could result in goods previously destined for Europe being diverted to our shores.
There’s also a crack in the government’s plan to use default values if actual emissions data isn’t available. At present, this will be based on a global average, effectively allowing half of imports to underpay for their embodied carbon. By contrast, the EU bases its default values for importers on quarterly average carbon emissions data that’s specific to the country and product. It also enforces a blanket markup of 10% on those rates, which will increase to 20% in 2027 and 30% from 2028, incentivising importers to accurately measure and report their emissions. By following in the footsteps of the EU and marking up its values, the UK could avoid underreporting and encourage emissions measurement.
Secondly, we need clarity on the CBAM rate and to test its application as soon as possible, using 2026 as a trial run period. The government has suggested testing in Q4, but by this point it will have run out of road to course correct and both UK producers and importers won’t have time to ready themselves. The ask from the sector is clear – continue working with us to fine tune the methodology and press on sooner rather than later.
Setting up for success
The decisions made in the next few months will be critical. By collaborating with UK cement manufacturers on the CBAM policy, the government can insulate its building ambitions from global supply chain volatility, support UK industrial decarbonisation and contribute to a growth driving sector. The recently launched consultation gives the industry a chance to share our views and expertise. We’re ready to work with government to make CBAM work in practice, but we need policymakers to listen and to act before it’s too late.
For more articles like this, visit our Sustainability channel.
