UK's plans to scale battery production 'insufficient for net-zero transition'
The UK Government's plans to support the battery manufacturing sector to scale up are not sufficient to deliver the transition to net-zero, nor to ensure that the UK remains a leader in this market globally, a Lords Committee is warning.
The warning has been made through a new report from the House of Lords’ Science and Technology Select Committee. This report has been published today (27 July) and is entitled ‘Battery Strategy Goes Flat: Net-Zero Target at Risk’.
“Despite recent announcements of UK Gigafactories, the pace and scale of building these facilities will not meet the demand for batteries and automotive manufacturing will most likely move overseas,” the report warns.
Notably, Nissan announced earlier this month that its Sunderland manufacturing facility will be transformed into an electric vehicle (EV) hub featuring a 9GWh Gigafactory. Then, Coventry Airport and Coventry City Council filed a planning application for a Gigafactory on the Airport’s estate. The UK's first Gigafactory is likely to be in Blyth, at the site of the former power station, where Britishvolt this month broke ground.
The report continues: “In the current international race to manufacture lithium-ion batteries, competitor nations have already invested more heavily than the UK. The UK cannot catch up with leading manufacturers; it can only try to attract enough investment to supply its automotive industry.”
Milestones taken into account in the report include the UK’s 2050 net-zero target and 2030 ban on new petrol and diesel cars, as well as 2027, when the Rules of Origin Agreement between the EU and UK comes into force. From this point, the EU will require that the battery and at least 55% of the other components of vehicles are manufactured within the bloc or in the UK. Ultimately, the Committee believes that the Government is not aligning its support for the battery manufacturing sector with any of these requirements.
Earlier this month, MPs on the Environmental Audit Committee (EAC) wrote to Ministers urging further funding for Gigafactories. The Committee’s letter outlines how other governments are typically supporting Gigafactories at a rate of £750m per plant, while the UK has pledged just £500m to the sector collectively, through the Automotive Transformation Fund. This is despite an ambition for the UK to host seven Gigafactories by 2027.
According to the new report from the House of Lords’ Science and Technology Select Committee, there is still a window in which to change policy significantly enough to align with key climate targets and ambitions on job creation, skills and economic growth. However, there is much to be done across the value chain.
The Committee is calling for greater clarity on how the Government will support the development of a UK supply chain of raw materials for battery manufacturing and more information about developing a robust skills pipeline for the battery sector. Members are also encouraging increased funding for the development of next-generation battery technologies, with the report stating: “The UK has a real opportunity to leapfrog to next-generation batteries and achieve a competitive advantage in the future. This would be dependent on the UK retaining its manufacturing capacity and automotive industry and providing substantial long-term support for research and scale-up.”
An exact figure for recommended funding for next-generation technologies is not provided. However, the report points to the recent Government commitment to deliver record levels of R&D funding, topping £22bn per year for the first time, stating that funding could be made here from 2024-2025. “Funding should be comparable to international competitors and should have long-term certainty,” the report states.
There are also several policy recommendations on supporting other parts of the EV value chain, including charging infrastructure, smart energy systems that deliver flexibility, and complementary technologies such as hydrogen.
On EV chargers, the report states that work to develop public charging networks has been “progressing too slowly”, despite major funding pledges through the 2020 Budget and subsequent Ten Point Plan. More must also be done, the Committee members argue, to support cash-strapped councils to deliver networks, and to standardise operations to minimise customer confusion and build confidence.
On hydrogen, the report expresses concerns that the Government was not able to publish its Hydrogen Strategy before Parliament rose for the summer recess last week. It recommends that the Government uses the Strategy as an opportunity to boost its focus on fuel cells – particularly given the recent commitment to end petrol and diesel heavy goods vehicles (HGV) sales by 2040. Floated is the idea of establishing research and innovation institutions for hydrogen fuel cells.
Parliament returns from the summer recess on 6 September. In the eight-week period that follows, several key policy packages will need to be published, to ensure that the overarching Net-Zero Strategy can be published ahead of COP26 as promised. The Hydrogen Strategy is one of these policy packages, as is the Heat and Buildings Strategy.