Draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2026

Gareth Snell Excerpts

Tuesday 27th January 2026 General Committees

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Sir Desmond. I want to make a couple of quick remarks, partly in relation to the ceramics industry—I am a one-trick pony at these events.

The sector is very grateful that it is not included in CBAM, for some of the reasons that have already been discussed. The current arrangements in the sector are quite challenging. I know the Minister is acutely aware of that, and has been a steadfast ally in some of our work to seek long-term support for a sector that is very difficult to decarbonise—it is incredibly difficult to improve on the technology because of the way in which it is set up—but is also producing things that are integral to the Government’s missions, whether that be house bricks for our house building programme or advanced ceramics to support our defence industry, our growing exports, our pharmaceuticals or the factories that we need, because we cannot make steel in this country without ceramics.

Let me put a couple of questions to the Minister. The first is on the allocation of free allowances. I recognise that CBAM will reduce the free allowance allocations that are put to those sectors that will be a part of it. Would it be possible to consider a reallocation of those free allowances to a sector that is not in CBAM and does not necessarily want to be, but for which the decarbonisation programme is most difficult—namely, the ceramics sector? We are still at huge risk of carbon leakage. We work in an unfair market at the moment, not least because of the way in which non-market economy status countries import into this country. The Trade Remedies Authority, which was set up by the previous Government, does not necessarily have the teeth to levy the import tariffs necessary to create a level playing field for consumers.

Secondly, where does the Minister see the cap going in future years? I am aware that a consultation was started by, I believe, the right hon. Member for East Surrey when she was the Secretary of State in the last Government, on how we could incentivise decarbonisation through raising taxation on the most polluting sectors. The Minister will be aware that the ceramics sector is desperately trying to do all that it can to reduce its output of greenhouse gases, but that is really difficult when it has to run a kiln at several hundred degrees for many hours to do the bisque and the glaze firing, and run refractories for 12 to 14 hours at 1,500°C.

Electrification is not available to many of those businesses at the moment, because the capital to invest in those sorts of kilns is simply not available; the profit margins on their products do not allow for it. Hydrogen is not a technology that is yet proven to be viable because of the chemistry that necessarily takes place inside a kiln. We are wedded to gas for the foreseeable future, and therefore wedded to being one of the country’s last remaining polluting industries. What the sector fears is that, as we move at pace to meet some of the decarbonisation agendas and reduce the overall cap through the emissions trading scheme, that will mean that the free allowances also have to come down, which will push the ceramics sector into having to buy many more free allowances. That cost will then simply be passed on to consumers, or—

[Richard Tice]

Will the hon. Member give way?

[Gareth Snell]

I will not, I am afraid. That will not then allow the sector to put in the investment needed to bring down the factories’ outputs through new technology. When the Minister sums up, will he address those two points? The sector—I think I am meeting them later today—will be glad to hear him do so.