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UK government Environmental Audit Committee to examine battery supply chain

Highlights

Committee will look at government encouragement for UK gigafactories

Ethical sourcing of materials also a key issue

Contributions encouraged for June evidence session

In an effort to ensure that the UK can reduce emissions by 78% by 2035, in which batteries for electric vehicles is due to play an important role, the government's Environmental Audit Committee will be examining the country's battery EV supply chain and its effectiveness.

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The government said May 4 that a supply chain focused on battery technology and the associated power electronics, machines and drives (PEMD) would be required for the UK's shift to EVs to be successful.

"A delay in growing this supply chain, or a failure to establish it, could undermine any advantage the UK has in this field," EAC said. "This would be reflected in fewer green jobs, reduced profits and increased carbon emissions, potentially jeopardizing the government's net zero ambition."

The UK is aiming to reach net zero by 2050 and has banned the sale of new petrol and diesel cars by 2030.

In the latest stage of the EAC's Technological Innovation and Climate Change inquiry, key issues that the committee will look at will include government encouragement to battery manufacturers to build gigafactories in the UK, investment in training, and the ethical sourcing of materials used in battery manufacture.

To explore how the supply chain can be developed to support the transition to EVs, the committee has called for any relevant contributions for its evidence session in June.

EAC Chairman Philip Dunne said that, with the government having pledged to ban the sale of new petrol and diesel cars by 2030, there were challenges in moving towards electrification, such as manufacturing capacity, a skilled workforce and extraction of critical components.

"We will be holding an evidence session in June to explore how the supply chain can be developed to support the transition to EVs," Dunne said. "We encourage anyone concerned about this issue to consider making a contribution."

Gigafactories needed

The EAC said that it had been estimated that at least eight gigafactories would need to be operational by 2040 to meet anticipated demand for EVs resulting from the government's plans to ban the sale of new petrol and diesel cars from 2030.

According to S&P Global Platts Analytics data, light duty plug-in electric vehicle sales in the UK are expected to reach 1.3 million units by 2040, compared to 175,000 units in 2020 and an expected 958,000 units in 2030.

There are already plans for one new gigafactory, with Britishvolt due to break ground on its gigaplant this summer in Blyth, Northumberland.

Britishvolt CEO Orral Nadjari said that without UK-based gigaplants, the country's automotive industry would face huge pressure as it transitioned to electrification.

"Rules of Origin amplify the need for home-grown battery production. No local battery capacity will potentially see the UK automotive industry move out of the country and closer to where batteries are produced.

"If EV production moves out of the UK, then vehicles will potentially need to be imported, causing additional costs for consumers. Quite simply, local battery supply is not only essential for UK plc, but also net-zero ambitions," Nadjari said

Britishvolt Chairman Peter Rolton added that it was essential that the UK forged ahead now with gigaplant ambitions to not only assist in future-proofing the country's automotive industry as it moved to electrification, but also to "create a clear glidepath to net-zero."

The EAC said it would also look at available opportunities for battery reuse and recycling to limit the need for mined raw materials.

It noted that lithium-ion batteries were the main battery technology used in EVs and, while there were plans to mine lithium in Cornwall, there were concerns about any raw material extraction resulting in habitat destruction, pollution and water use.

"The necessity for mining could be reduced with effective reuse and recycling," it said.

Cornish Lithium CEO Jeremy Wrathall told S&P Global Platts previously that it was "difficult to see the UK being able to achieve these objectives without domestic raw material supply given the demands imposed by the Rules of Origin and concerns over security of supply and sustainability."

"In our view, it is essential that the UK tries to build the necessary supply chains as fast as possible and does not overly rely on imported material, which may have dubious provenance," Wrathall said.

Cornish Lithium is developing two lithium projects in Cornwall: the Trelavour hard rock project and a lithium in geothermal waters project, which the company has said will both have a strong environmental, social, and corporate governance focus.