The UK's Minerals Product Association (MPA) has spoken out against the lack of government plans for balancing the need for building sustainable homes with the need to provide roadmaps for aggregates, cement and concrete. In the case of cement, the MPA says there are significant comparisons to the lack of competitiveness that has already crippled the UK steel sector.
The MPA says many of the same issues that have beset the UK steel sector are present in the UK cement industry, such as dealing with rising energy costs, the threat of carbon leakage and deindustrialisation. Dr Diana Casey, MPA executive director for energy and climate change, said the government’s plan for steel made worryingly familiar reading from a cement perspective: “Cement was recently identified as the UK’s most vulnerable sector to carbon leakage, which effectively shifts emissions to countries with weaker climate policies. We’re not in the same position as steel, yet, but we’re on the same trajectory, with the same trajectory, with the same uncompetitive industrial energy costs.”
Rising energy costs
Global energy prices began rising in the summer of 2021 and were driven up further by the Russian invasion of the Ukraine in February 2022. While the UK introduced energy price caps, the distinct lack of domestic energy production has exposed consumers and industry to energy price rises. While investment in renewables is ongoing, demand for clean energy will only increase as heavy industry looks to turn to electrical energy and carbon capture in attempts to decarbonise.
The end of coal fired power in the UK was achieved in October 2024, but the cement sector needs a vast amount of clean energy at low prices. By 2020 the country's electricity generated from renewable sources had reached 43 per cent. The UK continues to be supplementing renewables with nuclear power, which accounted for 14.2 per cent of energy needs in 2023 as well as natural gas, which accounted for 32 per cent of the country's energy supply. Wind power has been the biggest renewable energy source, generating 29.4 per cent of the national energy generation by 2023. However, solar power only contributed 4.9 per cent of the energy mix, biomass accounted for five per cent and hydropower contributed just 1.8 per cent to the 2023 energy supply.
UK cement investment
A simple glance at the UK cement sector highlights the vulnerabilities the MPA is concerned about. Breedon announced in its 2024 annual report that it intends to develop three new renewable energy projects. “Our strategy in the UK and Republic of Ireland is to hedge substantially all energy and carbon requirements for at least one year in advance, with further layered purchases extending into future years, to deliver near-term cost certainty, particularly for our UK cement plants,” announced the company in its annual results 2024 report.
The investments in energy infrastructure have been building for Breedon. In 2024 material capital investment projects totalled GBP23.4m compared to nil in 2023. These projects consist of the alternative raw material (ARM) being imported from the group’s Welsh slate mines, primary crusher project at Hope Cement and a solar farm at the Kinnegad works.
Government funding support
The UK Government is aware of the extra strain on the cement sector to keep production levels closer to capacity utilisation and the need to decarbonise. Government funds allocated to programmes such as carbon capture and decarbonisation may come under threat as the new UK government look to manage the budget deficit and environmental spending comes under closer examination. The Industry Energy Transformation Fund (IETF) has US$63.3bn available to support the advancement of low-carbon technologies, reduce energy costs and enable the shift towards more sustainable practices for 25 projects. The most important one for the UK cement sector is the 0.8Mta carbon capture and storage project at Heidelberg Materials’ Padeswood plant as part of the HyNet industrial cluster. While the statutory consultation for the project has now closed, it will be in 2028 when Padeswood becomes a net zero site producing evoZero carbon captured cement.
Government support has been crucial for the Padeswood carbon capture unit. “The Government’s backing of this critical technology highlights that it is supportive of UK industry’s transition to a low carbon future and means that the production of zero carbon cement before the end of this decade takes a big step forward,” announced Heidelberg Materials UK in October 2024.