Source · Select Committees · Business and Trade Committee
Recommendation 10
10
Accepted
UK dependence on China-concentrated global battery supply chains poses significant strategic risks.
Conclusion
Global battery supply chains, and especially the upstream supply of critical minerals, have environmental, social and governance challenges. Those supply chains are concentrated in China. The UK’s dependence on those supply chains poses risks to the UK and to the Government’s strategic objectives, especially if China were to restrict exports of the materials and components that the UK needs. It is critical that the UK Government continues to collaborate internationally not only to diversify the battery supply chain, but to ensure that batteries are produced to high environmental and social standards. (Paragraph 51) Batteries for electric vehicle manufacturing 51
Government Response Summary
The government is actively strengthening global critical mineral supply chains through various international collaborations, including signing partnerships with multiple countries, participating in multilateral forums, launching a Green Industrial Partnership with Norway, and negotiating an upgraded FTA with South Korea.
Government Response
Accepted
HM Government
Accepted
A) The Advanced Manufacturing Plan is a package of measures to build on recent successes and make the sector even more competitive, including increasing resilience via the Battery Strategy (published 26 November). The Supply Chains Resilience Framework and the Critical Minerals Strategy will continue to guide our efforts to support the battery supply chain. B) The UK is also leveraging engagement with our international partners to promote and secure opportunities for UK companies overseas through trade missions. In addition, we are assessing the need for further financing support in relation to critical minerals, and considering options for how any gaps identified might be addressed. This includes assessing the role that UKEF could play where finance is needed and there is a clear link to exports. C) The Government is working to strengthen the resilience of global critical mineral supply chains through international collaboration. The Government has signed international critical mineral agreements with seven countries: Australia, Canada, Japan, Kazakhstan, Saudi Arabia, South Africa, and Zambia, to help diversify supply chains and increase the UK’s security of supply. Each agreement leverages the UK’s strengths in mining services, finance, and R&D, and seeks to build high environmental, social, and governance standards. Furthermore, the UK is negotiating a critical minerals agreement as part of the UK-Korea Accord. D) Recent developments demonstrate the Government’s leadership when engaging internationally, such as the US-UK Atlantic Declaration that was agreed between the Prime Minister and the US President in June 2023. Negotiations have progressed on a targeted critical minerals agreement covering the five relevant critical minerals most important for electric vehicles – cobalt, graphite, lithium, manganese, and nickel. These aim to agree that minerals extracted or processed in the United Kingdom count toward sourcing requirements for clean vehicles eligible for the Section 30D clean vehicle tax credit of the Inflation Reduction Act. E) On 13 October 2023, Prime Minister Rishi Sunak, jointly with Norwegian Prime Minister Jonas Gahr Store, formally launched their joint ambition to develop a Green Industrial Partnership. This will be a cross-cutting effort with the aim of deepening cooperation on the green transition, benefitting supply chains and supporting skills in low carbon sectors. Importantly, it will include collaboration on low emission transport and EV batteries. F) On 22 November 2023 the RT. Hon. Kemi Badenoch MP met with Bang Moon- Kyu, Minister of the Ministry of Trade, Industry and Energy for the Republic of Korea, and announced the launch of negotiations to upgrade the Free Trade Agreement (FTA) between the Republic of Korea and the United Kingdom. economic and trade landscape, we will work to agree a new Rules of Origin chapter which reduces the costs businesses face when exporting and recognises our existing and future supply chains, enabling United Kingdom and Korean industries to take full advantage of the FTA.