The Mineral Products Association (MPA) has welcomed the UK government’s announcement of the new Energy Bill Discount Scheme (EBDS), extending the Energy Bill Relief Scheme. The broad support available through the EBDS encompasses most of the products manufactured by MPA members, including aggregates, asphalt, cement, concrete and industrial minerals. However, the MPA says the proposed support may not be sufficient to maintain the competitiveness of UK manufacturing should prices return to the high volatility observed over the last 12 months.
For energy intensive mineral products such as cement and lime, tackling high energy prices is critical. These sectors compete in international markets and government support is vital to ensure high energy costs do not render UK producers uncompetitive, which can lead to an increase in imports, a reduction in domestic production, and the associated loss of jobs and the sector’s economic contribution, says the MPA.
However, while energy prices are expected to remain high for the foreseeable future, the EBDS is only relatively short term and could leave the mineral products industry exposed if price fluctuations continue. A longer-term solution, through delivery of the commitments set out in Britain’s Energy Security Strategy, is required to properly address high UK energy costs.
“The announcement of ongoing government support is welcome, but there is still a risk that in the event of highly volatile prices, MPA members could remain exposed to high energy costs. As such, this support package provides only a partial, short-term fix. We call on the government to deliver the electricity market reforms promised in the British Energy Security Strategy as a matter of priority. Electrification is a key driver to decarbonise UK industry and the transition to net zero will rely on long-term secure supplies of competitively priced electricity. MPA believes that fundamental electricity market reform is the only way to ensure this is achieved,” said Jon Prichard, MPA chief executive.
