MPA welcomes UK–EU carbon market link, but warns of wider risks

The Mineral Products Association (MPA) has cautiously welcomed the UK Government’s proposal to link the UK and EU Emissions Trading Schemes (ETS), but warned that major risks to domestic cement and lime manufacturing remain unresolved.

The announcement, made on 19 May 2025, marks a significant step towards giving UK producers access to a more stable and liquid carbon market. The MPA, which represents cement and lime manufacturers across the UK, has been advocating for a UK–EU ETS link for several years as a way to boost investor confidence and align regulatory frameworks.

Dr Diana Casey, executive director for energy and climate change at the MPA, 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.”

Despite the positive step on ETS alignment, the MPA has reiterated concerns over persistently high industrial electricity prices, which remain among the highest in Europe. According to recent data from the Office for National Statistics, total output by UK energy-intensive industries—including cement and lime—has fallen by one third since 2021.

“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,” Dr Casey added. “It is also vital that the UK ensures its own Carbon Border Adjustment Mechanism (CBAM) is robust to ensure imports pay the same cost on carbon faced by domestic producers.”

The MPA has long argued that decarbonisation policies must be matched by competitiveness safeguards to prevent "deindustrialisation by decarbonisation". Without a watertight CBAM, the association warns, UK manufacturers risk being undercut by cheaper imports from countries with weaker carbon pricing.