UK government seeks to supercharge battery investment

The UK’s first ever Battery Strategy (the Strategy), published last week, sets out the Government’s positive commitment to development in the battery sector and a framework for how it will implement its objectives for an industry that it sees as vital in driving the economy forward. 

Given the Government’s spotlight, the battery industry and related sectors, including battery-containing product manufacturers, should watch this space for potential new regulations, continue to be mindful of their supply chain operations, and have an eye to how the push towards a circular economy for batteries impacts their business models.

Background

The Strategy was developed with input from the UK Battery Strategy Taskforce, drawing on a recent call for evidence from industry stakeholders on the essential role that battery design, manufacturing and recycling will play in helping the UK meet its net zero targets and support economic growth. 

The scope of the Strategy is expansive, setting out the Government’s vision for how the UK is going to achieve “a globally competitive battery supply chain by 2030”, and will be of particular interest to those involved in the battery supply chain from design through to manufacture and recycling/reuse, the automotive and energy transmission and storage sectors, and investors and developers involved in potential battery projects. 

What’s in the Strategy?

The Strategy sets out the Government’s objectives and priorities for the battery sector, in particular how the UK can build on its comparative advantage in research and advanced manufacturing, scale up its emerging supply chain, and continue to secure internationally mobile investment.   

The Strategy has three main focus areas: ‘Design’, ‘Build’ and ‘Sustain’:

• Design: the UK Government plans to support innovation and explore innovative financing mechanisms to help industry design and develop “the batteries of the future” – i.e. smaller and lighter batteries, with better capacity and value. The Strategy emphasises that maintaining stringent safety and product standards will be key here.
• Build: the Government plans to work with domestic industry players and international partners to secure a strong battery manufacturing supply chain supporting domestic growth and export markets. It wants to strengthen UK supply chains’ resilience and unlock new international markets, ensuring that planning reform facilitates that, while supporting energy-intensive industries.
• Sustain: the Government plans to facilitate sustainable development in the battery sector, including supporting upskilling across the industry, collaborating internationally on green trade, and using regulation and industry standards to encourage investment in the circular economy.

Manufacturers of electric vehicles (EVs) will be interested in the Strategy’s focus on batteries in the automotive industry and manufacturers’ recent commitments to EV production and research. Amongst other things, the Strategy commits to over £2bn in new capital and research in the automotive sector as part of its vision for the UK’s battery industry.

The Strategy explores topics of interest across other sectors too, highlighting sustainable supply chains. The Government acknowledges the growing need for: (i) high environmental and social standards throughout the battery supply chain (noting that mining critical minerals like cobalt and lithium is essential for battery production); (ii) sustainability to be “embedded in all corners” of the UK battery industry; and (iii) measures to incentivise reuse, repurposing and recycling infrastructure for all battery chemistry types. 

What should we keep an ‘ion’ next…?

New regulations or requirements may be on the cards for battery and battery-containing product manufacturers, as well as other players like designers and suppliers of raw materials. 

For example, a consultation on battery waste and end-of-life management is proposed to take place in early 2024, and entities throughout the supply chain could face new regulations on waste management and recycling in the “entire eco-system” of batteries. Meanwhile, the emphasis on aligning environmental standards in the battery supply chain could mean that heightened requirements are in the works for manufacturers when obtaining the materials they need to make their products. 

We may see the UK Government take a similar approach to that in the EU’s new Sustainable Batteries Regulation, published this summer, which aims to promote the sustainability of batteries throughout their life cycle and also expands supply chain compliance requirements (see our thoughts on this here). Also worth noting is the Strategy’s emphasis on product safety, which could spell new requirements or regulations there, too.

Overall, the Strategy champions increased investment and progress in the battery industry – and serves as a good reminder that there will be more to come as the industry continues to evolve rapidly.