(1 day, 19 hours ago)
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John Whitby (Derbyshire Dales) (Lab)
Cement may not grab headlines, but it quite literally holds up our country. Virtually every hospital, school, bridge and home is built using cement. Without a thriving cement industry, it will not be possible to deliver the renewal our nation needs and the 1.5 million homes the Government have committed to build.
Derbyshire is the proud home of Britain’s cement and lime industry. This critical material has been made there for generations, sustaining families, supporting our local economies and making the midlands one of our country’s great industrial powerhouses. Today, Derbyshire and neighbouring Staffordshire account for around 40% of all the cement and lime produced in the UK, and the industry supports more than 2,000 high-quality and well-paid jobs in our communities.
However, cement also produces significant carbon emissions, with around 7% of all carbon emissions globally coming from cement—more than come shipping and aviation combined. To put that in scale, in the UK, cement produces more carbon emissions than the entire city of Birmingham. We simply cannot tackle the climate crisis, safeguard our planet for future generations and deliver a net zero economy without tackling this issue.
At the same time, our UK cement industry faces increased pressure, with UK cement production now at its lowest levels since 1950 and imported cement making up an increasing share of the market. Decarbonisation should never mean deindustrialisation, and without action, we risk losing high-skilled jobs across the midlands and the north and an industry that is vital to our nation.
It is therefore essential that we invest in new technologies and make the UK, and Derbyshire in particular, world-leading producers of clean, green cement. Many of these technological innovations are already being pioneered right here in Britain. For example, Cambridge Electric Cement has developed a means of recycling used concrete back into cement, and the Institution of Structural Engineers notes that nine British-based cement innovations are working to take captured carbon and store it within the concrete itself.
I was also pleased to recently meet with Coolbrook, which is developing a heater that will heat air up to 1,700°C without burning fossil fuels. That would allow cement plants to replace the fuel used for burning with electric heating and reduce the amount of CO2 produced by between 30% to 40%. I encourage the Government to do all they can to support those emerging technologies and to use their research and development funding to ensure that such exciting innovations become commercially viable.
However, even if we reduce emissions from energy to zero, two-thirds of cement emissions are the by-product of the chemical process used to produce cement, and these emissions cannot be cut without carbon capture and storage. That means that even if all the exciting developments I have mentioned succeed, we cannot achieve zero-carbon cement without carbon capture and storage. Indeed, the fact that carbon dioxide is created as part of the chemical process used to make cement means that only carbon capture can eliminate the majority of emissions from its production.
To be clear, these projects have nothing to do with prolonging the use of fossil fuels. It is entirely about ensuring that we can safeguard this vital and important industry and protect the secure, high-quality, unionised jobs that are rooted in local communities such as the Hope valley. Without carbon capture and storage, we either have to stop producing cement or we fail to decarbonise—neither is an option that we can afford.
That is why Peak Cluster is so important. Based in the Hope valley, it is the world’s largest cement decarbonisation project, with the potential to decarbonise 40% of the UK’s cement and lime production. Under this project, carbon produced in Derbyshire through the production of cement will be captured and transported to Morecambe Net Zero, which will repurpose the Morecambe bay gas fields into a permanent and secure carbon storage facility, capable of storing more than 1 billion tonnes of CO2. That is a real example of how a just transition can protect workers and communities while reducing carbon emissions.
This world-leading innovation will also deliver major economic benefits for our country, supporting more than 13,000 jobs and attracting around £5 billion of private investment. It also has the potential to remove more than 3 million tonnes of CO2 each year, equivalent to a quarter of all the emissions created in Derbyshire and Staffordshire every single year.
That is why I was delighted that, in July, the National Wealth Fund announced that it would make its first venture into carbon capture and invest £28 million in Peak Cluster. This historic step demonstrates how the National Wealth Fund can play a major role in crowding in private investment and create the good, clean jobs of the future. It is estimated that every £1 of public investment in the project will deliver £4 of benefits. This is an economic opportunity that we cannot waste.
However, the job is not done yet. The investment from the National Wealth Fund is hugely welcome, but it is only the start. For the project to reach final investment decisions and unlock billions of pounds in private capital, industry needs one thing above all: certainty. At present, there is no clear route to market for carbon capture and storage projects beyond the track 1 and track 2 clusters. Without a defined framework for projects like Peak Cluster, private investors are left in limbo, which risks stalling progress just when momentum is building. We have seen too many examples in the past where projects received initial support from Government, only to stall because the next stage of policy never followed through. This cannot be another one of those cases.
I have two specific questions for the Minister. First, will he confirm that the Government will establish a clear route to market for industrial carbon capture projects beyond track 1 and track 2? Establishing a clear route to market would give investors and operators confidence that a final investment decision on Peak Cluster and Morecambe Net Zero will be made within this Parliament. The sooner that is done, the sooner businesses will have the certainty needed to invest, and the sooner all of us will benefit from the growth that such investments will deliver.
Secondly, will the Minister commit to introducing a contract for difference-style model for carbon capture to ensure that projects like Peak Cluster have the revenue certainty needed to attract private capital? Contracts for difference played a key role in enabling the widespread growth in renewable energy, and can also play a major role in supporting the growth of carbon capture technology. However, investing in clean cement here in the UK will be of no use if our builders import more polluting cement from abroad. The amount of imported cement has tripled over the last 20 years. Not only does imported cement have a higher carbon footprint, but the use of such cement undermines our British industry. The Government’s announcement that they will introduce a carbon border adjustment mechanism is therefore very welcome news, and demonstrates that this Labour Government will not allow our industrial industries to be offshored.
Furthermore, builders must also be incentivised to use cleaner, greener cement, and this will only be done if there are clear incentives to do so. It is therefore time for us to legislate to ensure that all developments report on how much carbon is released through the production and use of construction materials. Mandatory embodied carbon reporting is needed to drive down the emissions released from construction. Mandatory reporting would provide consistency to the construction industry, which must currently deal with a patchwork of local regulations, and reporting would also help stimulate the growth of lower-carbon building materials. Only sufficient demand will enable low-carbon technologies to develop at scale, and this demand can only be achieved through appropriate regulation.
The EU has plans to introduce mandatory embodied carbon reporting from 2028, and to set project limits on embodied carbon from 2030. When we left the EU, it was made clear that we would not reduce our environmental and climate standards, and I encourage the Government to align with the EU. The introduction of embodied carbon requirements in the EU also means that if we fail to decarbonise cement in the UK, our cement industry could be locked out of such markets, as builders will be required to use only low-carbon products in construction.
It is time once again to forge our future
“in the white heat of technology”.
By acting now, we can safeguard our historic industries, support our Government’s mission for growth, and deliver a more sustainable and greener world. It is time to be ambitious and to back British industry. It is, after all, desirable that the materials that build Britain are made in Britain.
I finish by returning to Peak Cluster. After all, whatever other positive interventions we make, simple chemistry means that we cannot cut the majority of emissions from cement without carbon capture. If we do not invest now, we will simply kick this can down the road, allowing other countries to move ahead of us and develop this emerging industry before we do. Today, I once again encourage the Minister to invest in jobs, British industry and decarbonisation. That can be done only if we establish a clear route for carbon capture projects not included in track 1 and track 2, and I encourage the Minister to establish such a route as quickly and urgently as possible.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Minister. I see he is very ably supported by Edmund Ward, whom I recall from my career history.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Chris McDonald)
I am so pleased that, due to a quirk in the timings, we have almost two hours for the discussion of cement. I will endeavour to make the best use of the time available.
I very much thank my hon. Friend the Member for Derbyshire Dales (John Whitby) for raising the issue of cement manufacture in the UK. I share his concerns about the current level of cement production both for Derbyshire and for the UK. I hope that by the time I resume my place on the Treasury Bench, he may feel a certain sense of reassurance given the priority I am personally giving to this issue. He made the case admirably for the cement sector based on the jobs and the impact on the local economy. I will endeavour to add to that economic argument by outlining the importance of the cement sector to the UK more broadly.
Breedon’s Hope cement works in my hon. Friend’s constituency is the largest in the UK. It supports 270 jobs in his constituency and contributes £60 million to the local economy. In my role as Minister for Industry, I intend to be as vocal and visible an advocate of British industry as he is for the industry in his own constituency. To be clear, my objective as Minister for Industry is to ensure that we secure a sustainable and prosperous future for this UK heavy industry.
Before I talk more broadly about the challenge of decarbonisation, I will briefly set out the role that the cement sector plays in the UK. Cement is of course an incredibly ancient material, which was developed and used extensively across Europe by the Romans. However, it would be wrong to think of it as a material of the past. It is subject to constant innovation, as we heard from my hon. Friend.
If you will forgive me for saying so, Madam Deputy Speaker, cement is quite literally the foundation of our modern economy. It is the essential ingredient used to construct everything from homes and hospitals to bridges, schools, roads and energy infrastructure. Without cement, there would be no new housing developments or transport networks. That is why we recognise in our industrial strategy that the cement industry is an essential ingredient in our eight key growth-driving sectors and part of our foundation industries.
Some of this Government’s biggest and most ambitious delivery programmes depend on the strength and durability of cement, including our plan to build 1.5 million homes over the course of this Parliament and the development of our clean energy infrastructure such as nuclear and offshore wind. However, it is also an economically important sector in its own right, contributing £340 million in gross value added and employing 1,500 people in high-skilled, high-wage jobs, with a wage premium 24% above the national median wage and 6% to 8% above manufacturing benchmarks. Indeed, businesses in places where there are cement kilns are often the most highly productive, with the most highly paid jobs.
My hon. Friend outlined the challenge of decarbonisation, and we need to find a way for the UK cement industry to cut emissions in the future. He mentioned that it is a very energy-intensive energy, and he rightly pointed out that the challenge in decarbonising cement is due to the calcination process in the manufacture of clinker. I have no extreme desire to turn the House into a lecture theatre, but it may be helpful to dwell for a moment on the chemistry of cement production.
The process involves heating limestone to over 1,450°C to transform it into lime. In and of itself, this process releases the carbon dioxide that had been trapped in the limestone for millennia, and two thirds of the emissions are from the calcination process. They are an inevitable by-product of the cement production process, and they cannot be abated by fuel switching.
That problem was recognised a few years ago by none other than Bill Gates. We imagine that Bill Gates goes to very exciting parties in California, but maybe they are not as exciting as we might think. He says that when he is at a barbecue with friends talking about decarbonisation, as they often do, his friends say to him, “Bill, decarbonising steel is very difficult,” and I know that is true from my career. He always says to them, “If you think decarbonising steel is difficult, decarbonising cement is almost impossible.” This is a challenge that even Bill Gates finds it difficult to address.
However, the UK has always been a pioneer in overcoming such challenges. As we have heard, many technologies have been developed in the UK, and I will expand on those in a moment. The UK has been a pioneer in cement, too. The invention of Portland cement 200 years ago by William Aspdin sparked a construction boom that shaped the country that we know today. That is what we need to harness now: innovation to face the challenge of decarbonisation. I will outline some of the progress that the industry and Government are making. There are, essentially, three opportunities for us in decarbonisation. The first is reformulating cement, so that it intrinsically has less carbon. The second is reduction—using less cement on each construction project. There are a number of ways of doing that. The third, which my hon. Friend described extensively, is carbon capture, which is a good place to start.
My hon. Friend spoke of the Peak Cluster carbon capture utilisation and storage project, which is partly located in his constituency. As he mentioned, the project has been developed outside the Government’s carbon capture usage and storage cluster sequencing process. It is an important project that aims to store over 3 million tonnes of carbon dioxide from the cement and lime factories that support jobs across Derbyshire, Staffordshire and the north-west. It could potentially decarbonise around half of our cement industry.
My hon. Friend mentioned the investment of £28.6 million secured from the National Wealth Fund, alongside £31 million of private sector investment. Just this week I met not only the Peak Cluster team, but Sumitomo, which is one of the largest private sector investors in the proposed pipeline. I look forward to further conversations with the Peak Cluster project to help bring this initiative to fruition. He asked me about contracts for difference. I recognise that there could be a role for contracts for difference. It is an area that I would be prepared to look at more closely in future.
Reformulation is about changing the recipe for cement, so that there is less embodied cement in each tonne produced. There are a number of other cutting-edge projects at various stages of development, although none has been fully commercialised. I alluded earlier to the historical role of cement. Again, this is not an entirely new endeavour. I mentioned that the Romans were particularly strong in the development of cement. The Pantheon in Rome has a marvellous dome, over 43 metres in diameter, which is constructed from three different formulations. There is limestone in the heavy cement at the bottom, and pumice stone at the top. Ultimately, changing the clinker that we use is at the heart of how we reduce carbon emissions in cement. I will outline a few projects that are ongoing.
First of all, there is Material Evolution’s MevoCem green cement project. It is working with global building materials company CRH, and has a pilot production facility in Wrexham that uses alkali fusion technology to produce cement at ambient temperatures, with no heat and using industrial by-products. Reclinker, formerly Cambridge Electric Cement—another project my hon. Friend mentioned—uses electric arc furnace slag and demolition waste to reduce clinker. Both projects began their experimental and pilot work at the Materials Processing Institute. Madam Deputy Speaker, if you refer to my entry in the Register of Members’ Financial Interests, you will see that I worked there in the past; I have worked on one of those projects, and supported another.
There is also Ecocem’s ACT, or activating cementitious technology. It is a low-clinker cement including limestone filler—this takes us back to that original initiative in ancient Rome—which is chemically activated to produce a strong, durable and low-emissions product. Today, I met one of the company directors when I visited the Amtest laboratories in Canning Town. You may think, Madam Deputy Speaker, that I do nothing other than talk to people in the cement industry, so interested am I in this technology.
However, it is not just the technology that we need; we also need improvements in standards. Developing cement is no good if we cannot use it, and we can use it only if we have confidence in its application in the long term. I was pleased to learn that industry is working on this, having developed a Flex 350 standard, which aims to be part 3 of BS 8500. That should hopefully give insurers confidence, and enable builders and designers to use some of these new materials. Innovate UK, as my hon. Friend mentioned, has supported many of these products; in fact, it has been overwhelmed by applications for new cement technologies.
Between the cement technologies and the reduction in cement that I mentioned, we could reduce carbon dioxide emissions per tonne and overall by around 40%. Of course, that leaves a residual amount for which carbon capture and storage, either through a pipeline or some other transport network, would be required.
Let us turn to the economic opportunity of cement. The pioneering work I have referred to is not just about cutting emissions and protecting our environment; we should not be blind to the huge economic opportunity. In 2023, the UK consumed just over 11 million tonnes of cement, but we produced only 7 million tonnes ourselves. The remainder, around 30%, was imported from primarily European countries, including France, Spain, Portugal and Ireland. This is quite a new situation, as it was usual for the UK to produce the cement that we needed in our own economy. Cement is very heavy, and it is expensive to transport. I see this as a lost opportunity to capture additional economic value for the UK.
Let me put it this way: if we produced domestically what we currently import, we would need to increase production by half. A 50% growth rate in the UK cement industry is conceivable; it would mean around five additional cement plants in the country. Between them, they would create around 750 jobs and £170 million in gross value added, and would eliminate nearly half a billion pounds in the trade deficit on cement that we had in 2023. Low-carbon cement also opens up new market opportunities. The Norwegian Brevik cement plant is now operating with carbon capture. It has sold out of its low-carbon cement in 2025, and has a growing order book.
I recognise that there is an important role here for not just technology but people. I welcome the support of the Institute of Concrete Technology, and I hope to be able to work with the Institution of Chemical Engineers. I place a very high value on the role that our professional institutions can play in helping people in our industries to transfer their skills across to new green technologies.
I turn to how the Government are supporting the industry. I start by acknowledging that the previous Government failed to recognise these opportunities. They neglected our heavy industry. By failing to invest in clean energy infrastructure, they left us dependent on fossil fuels and uniquely exposed to high energy prices, which led to a bills crisis across society. Heavy industry, including cement, was neglected.
The previous Government accepted that decarbonisation meant de-industrialisation; this Government do not. Through our industrial strategy, we are taking action to reduce industrial electricity prices. We are consulting on uplifting the network charging compensation scheme, a component of the British industry supercharger, from 60% to 90%, and we will publish a response shortly. The Government will also introduce the British industrial competitiveness scheme from 2027, which will reduce electricity bills by up to 25% for over 7,000 eligible British businesses.
The Government are also committed to delivering a UK carbon border adjustment mechanism to tackle the risk of carbon leakage, and we have published draft legislation to enable us to deliver it by January 2027. That mechanism will ensure that highly traded carbon-intensive products from overseas, including products in the cement sector, face a comparable carbon price to UK goods. I understand that it will give industry the confidence that it needs to invest in the UK. I was asked today to ensure that the cement industry faces a level playing field, and the carbon border adjustment mechanism will contribute to that.
I know that my hon. Friend is also interested in emissions reporting. The Government have just consulted on an embodied emissions reporting framework, which will simplify and harmonise existing private sector data and instil more confidence in the data that is being produced. It aims to help producers with measuring, reporting and verifying the embodied emissions of industrial products in a more standardised and comparable way. The objective of that is to remove information failures and support buyers in making informed purchasing decisions.
The Government are determined to mark a departure from the de-industrialisation of the past. We know how vital heavy industry such as cement is to our economy, to our most important building projects, and for thousands of well-paid jobs across the country. The Prime Minister himself has spoken of our determination to renew Britain through investment in new homes, infrastructure and public services. That renewal will also mean a re-industrialisation of parts of our country that suffered from factory closure and a lack of investment under the previous Government.
A new age of industrial renewal has begun. I thank my hon. Friend for securing this debate, and I look forward to working with him and the cement industry on how we can secure investment and grow the industry in the future.
Question put and agreed to.