Source · Select Committees · Business and Trade Committee
Recommendation 1
1
Rejected
Paragraph: 16
Specify domestic supply targets for UK battery demand by 2030 and 2040, including scaling-up plan
Recommendation
In the forthcoming UK Battery Strategy, the Government should specify the extent to which future demand for batteries in the UK should be supplied by domestic sources in 2030 and 2040, along with a 10-year plan for scaling-up this capacity and an estimate of the public money required to do so. To match our competitors, the UK Government should consider targeting at least 90% of the UK’s annual demand for batteries to be met from domestic supplies by 2030.
Government Response Summary
The government rejected setting fixed targets for domestic battery manufacturing capacity or committing to a specific 10-year scaling plan with estimated public funding, stating that the UK Battery Strategy will remain flexible to global markets and not enter a subsidy race.
Paragraph Reference:
16
Government Response
Rejected
HM Government
Rejected
A) The UK Battery Strategy sets out the Government’s vision to achieve a globally competitive battery supply chain that supports economic prosperity and the net zero transition by 2030. It will enable the UK to be a world leader in sustainable battery design and manufacture, underpinned by a thriving battery innovation ecosystem. The document outlines the Government’s activity to support our strategic objectives and establishes the framework and priorities for our future work with industry. Our focus and objectives are centred around building on our comparative advantage, scaling up our emerging supply chain, and securing internationally mobile investment. B) The UK Battery Strategy has not set fixed targets across the supply chain for domestic manufacturing capacity, as developments will continue to be driven internationally and it is important that we remain flexible to changing global markets and opportunities. It is not possible (or even desirable) for the UK to onshore all aspects of critical mineral supply chains. Resilient global supply chains have a diverse supply base and rely on global markets and an effective trading system. The UK and others benefit from such a system, and we will work with our partners to promote it. Respondents to the Call for Evidence highlighted that having an entirely domestic UK battery supply chain is unlikely feasible and often not desirable in promoting resilience. C) The majority of projected battery demand is made up by EV batteries and there is a significant opportunity for the UK as domestic and global demand for batteries increases. The Faraday Institution estimate that demand for UK battery manufacturing capacity will reach around 100GWh per annum in 2030, increasing to nearly 200GWh by 2040, predominately for private cars and light commercial vehicles (LCVs). D) The Department for Business and Trade will continue to ensure that existing public funding is used in a targeted and strategic way across all our programmes to support battery manufacturing, including the Advanced Manufacturing Plan and Auto2030. E) The Critical Imports and Supply Chains Strategy will help UK business build secure and reliable supply chains, which are vital to the UK’s economic prosperity, national security and the delivery of our essential services. The Strategy sets out how government is working with business and international partners to build resilient supply chains, demonstrating that the UK is a safe and reliable place to do business. across five priority areas: I. Making the UK government a centre of excellence for supply chain analysis and risk assessment. We will build on our existing expertise to better understand the goods and the broader supply chain systems, including transport routes and infrastructure, that the UK needs now and in the future. II. Removing critical import barriers to support the UK’s business-friendly environment. The government is committed to ensuring that the UK is a reliable, supportive place to do business where firms can import the goods they need efficiently. III. Building the UK’s response to global supply chain shocks. We continue to refine and expand our capability to forecast and respond to external shocks to global supply chains, from extreme weather events, the frequency of which is increasing due to climate change, to geopolitical incidents. We will help to ensure that businesses have the information they need to respond effectively. IV. Ensuring the UK can adapt to long-term trends. Building on the supply chains resilience framework and work in successive G7s to bring international partners together. We will ensure that the UK has the insights, policies and international partnerships needed to address long-term trends impacting supply chain resilience. V. Expanding collaboration between government, business and academia. close working with business. We also recognise the expertise that exists on these issues in academia. F) We will not simply duplicate the approach of others, nor enter a subsidy race. The UK has consistently taken action on net zero and supporting manufacturers. This includes targeted support for innovation and R&D, making the UK business environment even more competitive, and expanding our collaboration through free and fair trade.