Battery Supply Chain Motion

This House recognises that:

(1) Global battery supply chains, and especially the upstream supply of critical minerals, have environmental, social and governance challenges.

(2) Battery supply chains are heavily concentrated in China, in which the UK’s dependence on such supply chains creates a strategic vulnerability for the country, especially if China restricts exports of materials and components that the UK needs.

(3) Global competition in relation to the electric vehicle supply chain has intensified following the passing in 2022 of the Inflation Reduction Act in the United States.

(4) The Inflation Reduction Act has caused investment to flow into the electric vehicle supply chain, especially gigafactories, in the United States at the expense of Europe.

(5) The UK Government must urgently respond to intensified global competition with an internationally competitive package of long-term support to attract private investment into gigafactories and the wider battery supply chain within the UK.

This House further notes:

(1) The UK, unlike other international exporters, cannot have a self-sufficient supply of lithium-ion batteries and will continue to rely on imports of raw minerals, materials and components.

(2) There are strategic benefits to building the UK’s industrial capabilities across the battery supply chain, but especially in midstream processes such as the refining of raw minerals and the manufacture of cathodes and anodes.

(3) A battery supply chain in the UK would enable businesses based in this country to manufacture batteries sustainably and ethically, in which such a supply chain would offer the UK a competitive advantage over other markets, especially among the many consumers who demand higher environmental, social and governance standards.

(4) The UK’s access to low-carbon sources of electricity means that batteries produced in the UK will be produced more sustainably than those in China and many European countries.

(5) The UK is in a race with other large markets that are offering significant subsidies to boost domestic production of electric vehicles and batteries and onshore businesses in the supply chain.

(6) The Government does not necessarily need to match the scale of subsidies on offer in these markets, if the UK’s overall package is internationally competitive. However, the Government must provide a long-term stable business environment, with conditions that de-risk investments in the UK’s battery supply chain.

Therefore this House urges the Government:

(1) Must continue to collaborate internationally, especially with our allies, to —

(a) diversify the battery supply chain,

(b) safeguard the thousands of tonnes of critical minerals required for future battery production,

(c) ensure that batteries are produced to high environmental and social standards and to safeguard UK consumers from the risks of consuming products made in unethical ways.

(2) To explain how it will ensure the UK develops the capacity to build the battery supply needed by the nation to achieve our targets for Net Zero, in which they must —

(a) specify strategically critical industrial capabilities within the battery supply chain and set out the key interventions to incentivise businesses that can deliver those capabilities to locate in the UK,

(b) explain how the Government plans to promote robust environmental, social and governance structures across the battery industry domestically and globally to promote transparency and a green and clean battery supply, and

(c) introduce legislation requiring batteries available on the UK market to come with a battery passport explaining for consumers how sustainably and ethically such batteries were constructed.

(3) Improve the UK’s offer of financial support to ensure that it is globally competitive, in which it needs to substantially increase the amount and variety of financial support available and should conduct a benchmarking review to determine the scale, scope and diversity of financial support required.

(4) Provide longer-term certainty that UK businesses in the battery supply chain can access electricity at a comparable cost to competitors in other international markets. For example, the Government could underwrite long-term contracts between energy suppliers and businesses in the battery supply chain.

(5) Designate strategically important gigafactory sites and work with local partners to put together a targeted package of support to attract investors and ensure gigafactories are built faster, in which these sites should be given priority for improvements to energy and transport infrastructure, working with local partners to grant those areas special economic status.

(6) Address gaps in the skills needed to support gigafactories and other businesses in the battery supply chain, ensuring that local authorities or local councils — especially those that govern strategically important sites where gigafactories could be built — have adequate and flexible funding to tailor support for local training programmes in which offers of financial support to businesses in the battery supply chain should be conditional on these companies investing in upskilling and reskilling employees from the automotive industry and other sectors.

(7) Secure tariff-free access to global markets for electric vehicle and batteries manufactured in the UK and de-risk access to the requisite critical minerals and supply chains through agreements with our allies.

(8) Put research and development into battery technology on a long-term footing to ensure that the UK remains at the cutting-edge of battery technology.

This Motion was Submitted by Lady u/Waffel-lol LT CMG, Spokesperson for Business, Trade and Innovation, and Energy and Net-Zero on behalf of the Liberal Democrats.

Referenced and Inspired Documents

Inflation Reduction Act 2022

Batteries for electric vehicle manufacturing

Opening Speech:

Deputy Speaker,

In the most recent election, the Liberal Democrats made a manifesto pledge towards working towards a Britain that heavily invests in battery power and building Britain’s industrial capabilities for greater e energy security and sustainability. This motion reflects our commitment to our manifesto on the matter in still trying to deliver and see progress on what is an important topic that needs to be addressed sooner rather than later.

The United kingdom is in a global race with competitor nations that want to develop their battery industrial capabilities, such as China. However, frankly we lag behind both our US and European counterparts also. With international competitors rapidly expanding their share of the global battery market, it is important for us to act now to remain competitive and ensure the UK remains a leading nation in sustainable energy and innovation. As it stands the UK is heavily dependent on Chinese battery supplies, where should the restriction of exports in materials and components occur, would reveal a strategic vulnerability in energy security and industrial capabilities. In building resilience, we call strongly for a diversification of supply chains as the most apt resolution that embraces free and fair trade, as opposed to hawkish protectionism or notions of autarky. The UK does not have the natural resources nor industrial capability to be self-sufficient in lithium ion batteries, but it can play a key role in midstream processes and working with allies and partners to open up new streams and markets.

The automotive industry comprises most of the demand for batteries. However the UK needs gigafactories that can cater to the diverse array of vehicles built in the country and other sectors that are likely to emerge in the near future. Serving those markers will undoubtedly deliver strategic benefits in the long run. Failure to invest in battery manufacturing could see the gradual decline in automotive production within the U.K as manufacturers may prefer to locate electric vehicle production equipment in countries that host key resources such as gigafactories. Placing thousands of jobs within the sector at risk in the UK. As the Liberal Democrats are a party committed to long term thinking and innovating for the future, it is imperative in our view that the UK builds an industrial base for gigafactories. For maintaining energy security and the ability to unlock emerging benefits driving economic growth and new jobs from green industries.

This Reading will end on the 1st at 10PM