The UK Government’s proposal to link the UK and EU Emissions Trading Schemes (ETS), which was announced on 19 May 2025, has been cautiously welcomed by UK cement and lime makers.
The Mineral Products Association (MPA) has been calling for a link between the UK and EU schemes for several years and welcomed the announcement as one part of the policy framework needed to support the sector.
However, the MPA, which represents UK producers of essential cement and lime, has also repeated its calls for the Government to tackle the high electricity costs that exacerbate the industry’s issues, undermining its international competitiveness and making it vulnerable to imports. It has also reiterated the importance of delivering a watertight UK Carbon Border Adjustment Mechanism (CBAM), levelling the carbon costs with imports from outside the EU and preventing decarbonisation by deindustrialisation.
Linking the two schemes will give UK cement and lime producers access to a larger, more liquid carbon market, which will bring the stability needed to promote investment confidence.
Wider competitiveness challenges also remain for sectors like cement. For example, the Office for National Statistics has released data on the impact of energy prices on UK businesses, highlighting that UK industrial energy prices are some of the highest among international peers*. This is one of the reasons why total UK production by energy-intensive industries, including cement and lime, has fallen by one-third since 2021.
Dr Diana Casey, MPA’s Executive Director for Energy and Climate Change, said: “We’ve been calling for linking UK and EU schemes for some time, and the Government’s announcement is a step in the right direction.
“However, the governance of the ETS is crucial to get right, and it’s unclear how much of a say the UK will have in shaping the evolution of the emissions trading scheme and its interaction with the CBAM. We also can’t ignore the fact that wider barriers to the competitiveness of UK cement and lime manufacture remain.
“While we welcome moves towards linking, it is important that this is followed up by bringing UK industrial electricity costs into line with competitor economies. It is also vital that the UK ensures its own CBAM is robust to ensure imports pay the same cost on carbon faced by domestic producers.”
*ONS “The impact of higher energy costs on UK businesses: 2021 to 2024”, 19 May 2025 https://www.ons.gov.uk/economy/economicoutputandproductivity/output/articles/theimpactofhigherenergycostsonukbusinesses/2021to2024
