UK Industrial Strategy: Takeaways for Industrial / Hard to Abate Sectors

As the UK's Modern Industrial Strategy takes shape, foundational industries; steel, cement, and chemicals are at the forefront of the transition to net zero. While these sectors underpin our economy, they also represent some of the greatest decarbonisation challenges. To achieve real progress, strategic innovation, robust policy support, and collaborative industry leadership must come together.

Framed by the tagline “Build it in Britain. Power the World,” the strategy signals a decisive shift: a boost for homegrown industrial projects that deliver both emissions reductions and global competitiveness. This is not just about decarbonising existing processes—it’s about positioning UK industry as a clean tech leader, capable of powering the infrastructure, energy, and materials transitions needed worldwide.

Steel: A National Priority

Steel production is integral to Britain’s Industrial Strategy, underpinning vital infrastructure projects and playing a foundational role in clean energy and technology developments, including electric vehicles and wind turbines. Aligning this strategy with major infrastructure initiatives, such as Heathrow’s third runway, creates a clear demand signal for domestically-produced, low carbon steel, essential for advancing numerous low carbon initiatives.

Yet, decarbonising steel production remains a significant challenge. A key step highlighted in the Industrial Strategy is the deployment of electric arc furnace (EAF) technology, exemplified by the £500 million investment in Tata Steel’s Port Talbot facility. EAFs offer a cleaner alternative to traditional coal-based methods but rely heavily on ample supplies of recycled scrap metal and considerable quantities of clean electricity.

To fully decarbonise steel production, further investment in low-carbon technologies is necessary. The Industrial Strategy identifies Carbon Capture, Utilisation and Storage (CCUS) and hydrogen as critical areas for investment, technologies that also align closely with the decarbonisation needs of other hard-to-abate industries such as cement and chemicals. Achieving meaningful progress in these sectors will require sustained commitment to innovation, supportive policy frameworks, and clear long-term market signals.

Cement & CCUS: The Essential Connection

The UK’s Modern Industrial Strategy 2025 identifies cement as a priority foundation industry where deep decarbonisation is essential but technically challenging. Around 60% of emissions from cement production come from the chemical process of calcination, making them unavoidable through energy switching alone. The strategy confirms that Carbon Capture, Usage, and Storage (CCUS) is critical to reaching net zero in this sector. It highlights projects like Heidelberg Materials’ Padeswood plant in North Wales as examples of how CCUS can enable emissions reductions at scale while supporting industrial competitiveness and regional growth.

Irina Gorbounova, Vice President M&A and Head of the XCarb Innovation Fund at ArcelorMittal, underscores the urgency:

"If we are serious about net zero, we can't just focus on the shiny technologies like electrical vehicles, carbon offsets, and solar panels. All of those are important, but it's industries like steel, cement, chemicals, shipping, and aviation that account for close to 30% of global CO2 emissions. This is the hard stuff we need to tackle—it's hard to abate, but it's even harder to ignore. Steel and cement are foundational; they're in every electric vehicle, every wind turbine, skyscraper, bridge, and across infrastructure”.

Place-Based Strategies and Industrial Clusters

Industrial decarbonisation is also geographically strategic. The UK’s Modern Industrial Strategy 2025 prioritises Investment Zones and low carbon industrial clusters—such as HyNet in the North West and the East Coast Cluster in Teesside—as focal points for delivering net zero. By co-locating infrastructure, workforce skills, and supply chains, these clusters reduce costs, accelerate innovation, and unlock private investment. They also support levelling up by driving regional growth, ensuring the economic benefits of decarbonisation are widely and fairly distributed.

Innovation Spotlight: Cambridge Electric Cement

Innovation Zero spoke with Poppy Brewer, COO and co-founder at Cambridge Electric Cement, a pioneering company reshaping the cement sector. Brewer explained their unique approach: "Our product is really about low carbon circular cement. We've found a way to produce cement within existing steel-making furnaces, cutting emissions down to a third compared to traditional methods, yet remaining cost-competitive."

Brewer further highlighted their ambitious growth plans: "In five years, our goal is to have over 10 electric arc furnace steel plants operating with our process, producing approximately a megaton of cement with significantly lower emissions. Ultimately, we aim to establish a double circularity model—what we call an 'urban quarry'—where steel and concrete from demolished buildings can be recycled through our furnaces, closing the loop on construction materials sustainably."

Cambridge Electric Cements work supports the ambitions of the UK’s Modern Industrial Strategy 2025, which prioritises deep decarbonisation in foundation industries and place-based innovation. By embedding circularity and industrial efficiency, CEC offers a scalable, market-ready model for cutting carbon in hard-to-abate sectors.

The Road Ahead: A Just and Competitive Transition

For Britain's industrial transition to succeed, the focus must remain on real-world solutions that balance ambition with practicality. The interplay of government support, technological innovation, and business leadership catalysed by Innovation Zero highlights the way forward. By connecting the policy framework to the people and organisations driving change—from industrial innovators to global investors—Innovation Zero plays a vital role in accelerating strategic alignment and action.

Decarbonising our hardest-to-abate sectors is not merely necessary—it's an opportunity for Britain to lead globally, build resilience domestically, and ensure that the benefits of the green economy are shared by all.

The message is clear: Build it in Britain. Power the World.