Battery Strategy (Science and Technology Committee Report)

Baroness Sheehan Excerpts

Wednesday 23rd November 2022 Grand Committee

[Baroness Sheehan (LD)]

My Lords, I start by commending the noble Lord, Lord Patel, for his skill in chairing the committee that put together this report. I am proud to say that I am a member of that committee. I also congratulate him on the way in which he introduced the debate, which leaves me with very little to say except that I agree with the remarks that he has already made.

It is a shame that it has taken over a year since the report was published for it to come before your Lordships’ House for debate. Batteries powered by zero-emission energy sources are on the front line of our battle against climate catastrophe, and this report concludes that the Government need to do much more to secure Britain’s place in the forefront of the battery revolution.

The bans on the sale of new petrol and diesel cars and vans by 2030, hybrids by 2035 and heavy goods vehicles by 2040 were welcome announcements, given that emissions from the transport sector make up about one-fifth of all greenhouse gas emissions in the UK, and had shown themselves to be resistant to efforts to bring them down. However, ambition without action is pure hubris and doomed to failure. The committee’s conclusion that it could not identify a government plan for the rapid action needed to achieve the Government’s stated aims has not been disproven with the passage of time.

Since the report was published, there has been a revolution in the car industry. Changes have been hastened by the unpredictable events of Russia’s invasion of Ukraine and the ensuing chaos in the production and cost of fuel. The sales of new EVs in the UK have increased enormously. In the half-year to June 2022, pure-battery electric vehicles enjoyed the biggest growth in any fuel type, with 56% more registrations—and that was in the context of an overall market that shrank by nearly 12%. Furthermore, despite the worldwide semi- conductor shortage and Covid lockdowns in China, global sales of EVs rose 61% in quarter 2 of this year.

Our car manufacturers are first class, but the sharp increase in sales of EVs is steeper than predicted. Can they meet the numerous challenges? For example, we will need a secure supply of critical resource materials— the noble Lord, Lord Lilley, spoke at length about those—chief among them lithium and cobalt. So the Government’s publication, finally, of the 2022 critical minerals strategy is welcome. Some might say it is too little, too late, but it is here now. However, it lacks any statement of where we might find some resilience in the supply of these critical minerals. These supply chains are always risky and fragile and are currently disrupted due to the war in Ukraine, Brexit, Covid-19, and other conflicts in producer regions. So the Government miss a trick when they fail, yet again, to address demand reduction to increase resilience.

According to research by Greener UK—and I thank it for its briefing—reducing demand for electricity in our homes by heat pumps, and on our roads by improving public transport infrastructure, are two examples that could halve the UK’s total future use of critical resources by 2030, compared with the current trajectory. This is a no-brainer, so why are the Government still resistant to action on reducing demand for electricity?

Secondly, I urge the Government, through the Minister, to address recommendation 30 in the report that the Government should set out clear plans for developing industrial-scale recycling of batteries in the UK, including ecodesign rules to make them easier to disassemble. It is another oversight of the critical materials strategy in that it fails to expedite a circular economy and create a market for safer, cheaper and more secure supply chains of recycled materials for battery manufacture. The EU has already introduced rules, and it is time that we tried at least to match them.

We have an excellent car manufacturing industry, but the report concludes that we risk losing it to our European competitors if we cannot meet the deadline of 2027, by when the rules of origin conditions for sale of vehicles to the EU will kick in. This will require the battery in EVs to be wholly made in the UK or EU, and 55% of the rest of the car to be made in the UK or EU, for tariff-free access to the EU. At our current trajectory of battery manufacturing capacity, we will lose production to the EU or other competitors abroad. In October, BMW announced that its hatchback and small SUV electric Minis will start being built in China. Its electric Countryman model will be built in Leipzig, Germany. The noble Lord, Lord Patel, has cited several other examples. This, I fear, is a sign of things to come.

Can the Minister say what urgent steps the Government are taking to meet the 2027 deadline agreed in the TCA? It might be too late for some of our car manufacturers, but it might protect others. In his response, can he reference the situation at Britishvolt and bring us up to date with the Government’s views on its future viability?

In 2017, the then Business Secretary, Greg Clark, announced the launch of the £246 million Faraday Challenge to establish the UK as world leader in battery technology. It was a start, but since then there has been little follow-through. Investor and industry confidence has been further damaged by the abolition of the Industrial Strategy Council.

In conclusion, I refer to recommendation 31 of the report, that the

“Government should explain to industry what will replace the industrial strategy”—

something that is sorely needed if we are to stay at the forefront of next-generation batteries and realise a successful future for our fuel cell manufacturers.