Producers of cement and lime have welcomed plans announced today by the Government to boost UK competitiveness through compensating for high network charges as part of the ‘British Industry Supercharger’.

The Mineral Products Association (MPA), which represents UK cement and lime manufacturers, says the network charges compensation announced by the Department for Business and Trade will ease electricity costs and narrow the disparity between the UK and EU industrial electricity prices.

Combined with other elements of the Supercharger proposals, this goes some way towards supporting the industry’s ability to compete with overseas manufacturers.

The British Industry Supercharger comprises three measures, aimed at creating a more competitive and sustainable industrial sector:

• Increasing the existing Energy-Intensive Industries Renewable Levy Exemption scheme from 85% to 100%.
• Introducing a 100% exemption from the costs of the Capacity Market.
• Compensating 60% of the charges incurred by the industry’s use of the electricity grid via a Network Charging Compensation Scheme.

The total package will save eligible businesses an expected £24 to £31 per MWh.

Dr Diana Casey, MPA’s Executive Director for Energy and Climate Change said: “After lengthy discussions exploring the challenges faced by cement and lime producers, and the knock-on impact for the UK economy as a whole, we are pleased that the Department for Business and Trade has acted quickly to achieve a major step forward for the industry.

“The cost of electricity is considered a contributing factor to increasing imports of cement into the UK, which have slowly crept up by about 1 percentage point per year until 2021 and 2022 when they shot up by 4 percentage points per year.

“Fair electricity prices will be absolutely critical for cement and lime producers to continue to decarbonise in line with our roadmaps, especially the transition to carbon capture, usage and storage, which will significantly increase power demand. If electricity prices are not competitive, they could be a barrier to producers delivering on our net zero commitments.

“Even with the new Supercharger measures, in the UK we still pay more than competitors in the EU for electricity and that disparity puts cement and lime producers at a disadvantage. Although today’s action is a real breakthrough, we look forward to continuing the dialogue with Government to ensure cement and lime producers can remain competitive.”

ENDS

About the Mineral Products Association:

The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and industrial sand industries. With the merger of British Precast, and affiliation of the British Association of Reinforcement (BAR), the British Calcium Carbonate Federation, the Cement Admixtures Association (CAA), CONSTRUCT, Eurobitume, MPA Northern Ireland, MPA Scotland and the UK Quality Ash Association (UKQAA), it has a growing membership of 520 companies and is the sectoral voice for mineral products. MPA membership is made up of the vast majority of independent SME quarrying companies throughout the UK, as well as the 9 major international and global companies. It covers 100% of UK cement and lime production, 90% of GB aggregates production, 95% of asphalt and over 70% of ready-mixed concrete and precast concrete production. In 2021, the industry supplied £22 billion worth of materials and services to the Economy. It is also the largest supplier to the construction industry, which had annual output valued at £178 billion. Industry production represents the largest materials flow in the UK economy and is also one of the largest manufacturing sectors.

For media enquiries, contact Elizabeth Clements at: Elizabeth.Clements@mineralproducts.org