Battery Strategy (Science and Technology Committee Report)

Lord Patel Excerpts

Wednesday 23rd November 2022 Grand Committee

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[Lord Patel]

That the Grand Committee takes note of the Report from the Science and Technology Committee Battery strategy goes flat: Net-zero target at risk (1st Report, Session 2021-22, HL Paper 53).

[Lord Patel (CB)]

My Lords, it is a pleasure to open this important debate on the Science and Technology Committee’s report, entitled Battery Strategy Goes Flat. Before I do so, I thank all those who gave evidence to the committee: our committee staff; the committee clerk, Dr Simon Cran-McGreehin; our analyst, Dr Amy Creese; Ellie Hassan, a POST fellow and the committee constant, without whom chaos would prevail; and Cerise Burnett-Stuart, the committee operations officer. I most sincerely thank them all.

My particular thanks go to our specialist adviser, Professor Clare Grey FRS—who has recently become Dame Clare Grey DBE FRS, and who I am pleased to say is listening to us—and Geoffrey Moorhouse Gibson, professor of chemistry at the University of Cambridge. Their advice, knowledge and expertise guided the committee. Last but not least, I thank all the committee members for their help and hard work; they were never controversial, and they never challenged me, at least.

I regret that, due to previous commitments, our current chair, my noble friend Lady Brown, is unable to take part today. I am grateful to the Minister for taking time to reply to the debate today; I have no doubt that he will do so in his much-appreciated customary manner of answering the questions raised by those speaking and not just sticking to the brief provided. I most sincerely thank all noble Lords, not just the members of the committee, for making time to take part in today’s debate.

The title of our report is Battery Strategy Goes Flat: Net-Zero Target at Risk, and it was published on 27 July 2021. At the time, it seemed a provocative title, but subsequent events and the recent news seem to have confirmed our scepticism. The report—which has four key chapters covering the applications of batteries and fuel cells, technological developments and, importantly, strategic issues facing the UK for decarbonising the transport system—makes several conclusions and suggests government action to make the UK a leader in batteries and fuel cells. The Government’s response, while not disagreeing with the conclusions or details in the report, was not convincing as a clear delivery plan. Most of the responses to our ask for government action used the phrase, “The Government are committed to”, but provided few details as to implementation. I hope that the Minister, in responding, can put that right today.

At the time of the report’s publication, the committee felt that the UK policy of battery manufacture was insufficient to meet the future needs of the automotive industry as it transits to the government policy of full electrification of cars and smaller commercial vehicles by 2030. The requirement of seven to eight gigafactories by 2030, as suggested by our witnesses, is not likely to be met; in turn, our net-zero commitments will not be met either. The committee felt that the pace and scale of the building of gigafactories in the UK will not meet the demands for batteries by the automotive industry, and the UK would risk losing much of its automotive industry to overseas. In our evidence sessions, many witnesses felt that the UK faced serious challenges from our competitors, and that we were behind them not only in the manufacture of batteries but in innovations, supply chains and skills.

I recognise that the UK now has a critical minerals strategy to fill the gap in supply chains—a positive step—but no clear implementation plan, without which the UK will again miss out to competition for securing much sought-after minerals.

We were astonished by the stark disconnect between the optimism of Ministers and officials and the evidence from our many witnesses that the UK will be unable to maintain its automotive industry. The two immediate deadlines, of 2027, when the rules of origin agreement will require batteries and 55% of components to be manufactured in the UK or the EU, and 2030, when production of all petrol and diesel cars and vans will cease, are unlikely to be met. Without scaling up the domestic manufacture of batteries and urgently focusing on improving the supply chain of materials, the UK will end up importing batteries and vehicles.

A recent report in the media summarised well the current state of battery manufacturing in the UK and the future of the automotive industry. Recent events have put an end to the UK’s ambition to be a global hub of the electrified automotive industry. BMW has announced the end of production of its electric Mini in Cowley, which it is moving to China. Johnson Matthey, a leader in the development of battery technology in Britain, has quit the sector, citing competition from China and South Korea as a reason. Arrival, once a promising enterprise for the manufacture of electric vans and buses in the UK, is rumoured to be moving to the USA.

When it comes to battery manufacture, Britishvolt, once highly trumpeted as the UK’s big gigafactory, is now reported to be in serious difficulty and is possibly facing insolvency. Another such enterprise at Coventry airport has hardly got off the ground. This leaves the UK with one gigafactory, so it seems we have lost out on the international race to manufacture lithium-ion batteries.

The UK still needs the capacity to supply its domestic market, so I ask the Minister: what plans do the Government have to attract investment in building gigafactories for the production of batteries in the UK? How many will there be, and what is the timescale for when such facilities will be up and running? Does he think the UK can still meet its commitment to phase out petrol and diesel cars by 2030?

Although we may have lost the race to be the global hub of lithium-ion batteries, the UK could be a leader in the development of the next generation of batteries, such as solid-state, lithium-sulphur and sodium-ion technologies. To exploit the competitive advantage that we currently hold, the Government need to show strong support for both research and manufacturing. As yet, there is no sign of the Government doing so. I ask the Minister: do the Government intend to provide a UK strategy for the manufacture of the next generation of electric batteries in the UK, and to increase support for the research and development of such technologies?

We need to grow our innovators, yet this is also threatened. For example, the Faraday Institution, which received flat funding until 2025, will not be able to recruit PhD students in 2023, as funding cannot be guaranteed beyond 2025. How are we to grow the next generation of innovators if we cannot recruit them because of lack of funding?

The Government can still meet their ambition to be a global hub of battery production by demonstrating a strong commitment to the research and manufacture of the next generation of batteries, and not risk losing our automotive industry.

I shall now move on. Our report also reported on the production of hydrogen. Soon after the publication of our report, which asked for a clear policy on hydrogen and fuel cells, the Government published their hydrogen strategy in August 2021. It stated the Government’s ambition to deliver blue hydrogen generation capacity of 5 gigawatts by 2030 and the first 1 gigawatt by 2024. More recently, the Government have increased this by committing to increase the capacity of hydrogen generation to 10 gigawatts by 2030. Will the Minister say how and where this is to be achieved, and in what timescale?

The UK’s current capacity for hydrogen production is way short of the Government’s ambition. None of the strategy refers to the development and production of fuel cells, a technology where UK excels, with several UK companies operating overseas but not in the UK.

There is a lack of clarity about the Government’s plans for the use of hydrogen for light and heavy goods vehicles, the development of infrastructure for the supply of hydrogen, and the use of hydrogen and fuel cells for domestic heating, and in the not too distant future there will be a need for a joined-up strategy on the use of hydrogen, ammonia and aviation fuels. When will the Government make these decisions and will there be a paper describing them?

The Government also need to address public concerns about the safety of batteries and hydrogen fuel cells and the regulatory changes needed to address this. What plans do the Government have to address these issues?

I have no doubt that other noble Lords will speak to many other issues that our report identified, including the need to expand vehicle charging points, address the skills gap and increase research funding for batteries and fuel cells.

If the Government are to deliver on their net-zero commitments, these issues need urgent attention. I will be surprised if someone does not ask about the implications of net-zero policies, given the current energy crisis and rising costs. The view of the committee was clear about the role that batteries and hydrogen fuel cells can play in delivering net-zero policies. The evidence presented to us was also clear that the Government need to do much more. All the evidence suggests that the Government have big ambitions and are doing something, but not enough. We need more action and commitment from government to give confidence to industry, investors and our research community. The Government’s ambition needs to be matched by their action. I beg to move.

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[Lord Patel (CB)]

My Lords, I thank the Minister most sincerely for answering many of the questions raised, or at least for making an attempt to answer them. As he said, many remain unanswered, and I am glad that he has committed to writing to noble Lords.

When I listened to his answers, I came to the conclusion that everything the Government are doing is fantastic, and we should be world leaders in battery technology, battery science and so on. However, in reality it turns out that we are not. The question that I raised in the first place remains. The Government are doing something, but is it enough? I am glad that the Minister said he took note of the points raised and that the Government will think about it and see what action needs to be taken.

Having heard that response from the Minister, I hope the committee might in due course look at this again in a quick report to ask questions about how much is being done. For today, I thank all noble Lords who have taken part. It has been a very interesting and committed debate on the part of all noble Lords. I thank the Minister again in particular.

Motion agreed.