As the global economy grapples with mounting geopolitical tensions and supply chain disruptions, a new report from the Institute for Public Policy Research (IPPR) has sounded the alarm on the UK’s over-reliance on Chinese imports for its clean energy supply chain. The findings suggest that a year-long disruption to the supply of essential battery components used in electric vehicle manufacturing could put 90,000 jobs at risk and wipe out production of more than 580,000 electric cars.
The IPPR’s report underscores the vulnerability of the UK’s clean energy goals, which could be jeopardized by delays in the supply of solar components and batteries, costing the economy an additional £1.5 billion per year by keeping the country reliant on expensive gas generation. The think tank has called on the Chancellor, Rachel Reeves, to pursue a policy of “securnomic” – a strategy that emphasizes greater international investment and partnerships to bolster the UK’s energy security.
“The world’s over-reliance on China exacerbates these risks,” the report states. “Eighty to ninety per cent of global refining for critical minerals is controlled by China. Relying on a single source of supply leaves the UK and our allies more vulnerable to geopolitical and economic shocks.”
The findings come as China continues to dominate the global manufacturing of electronic technologies, including components essential for renewable energy projects. Last year, the world’s second-largest economy reported a record trillion-dollar global trade surplus, even as the Trump administration sought to slow the manufacturing powerhouse by imposing trade tariffs designed to shift US orders to other markets.
Economists expect China to further solidify its global market share this year, aided by Chinese firms setting up overseas production hubs that provide lower-tariff access to the US and EU, as well as ongoing strong demand for lower-grade chips and other electronic components.
However, Beijing has also shown signs of recognizing the need to temper its industrial exports to address the imbalances in China’s economy and the image problem its export volumes are causing among its global trade partners.
The IPPR has called on the government to clarify its position on Chinese investment and involvement in the UK’s clean energy supply chain, and to invest more in domestic production of batteries and green steel. The think tank also recommends that the government work with allies to invest in international stockpiles of solar, battery, and critical minerals to mitigate the risk of supply chain shocks.
A government spokesperson stated, “Thanks to our industrial and critical minerals strategies, we’re backing our automotive and clean energy sectors to grow, cutting our dependency on imports and protecting British jobs.”
As the UK navigates the choppy waters of the global economy, the need for a robust and resilient clean energy supply chain has never been more pressing. The IPPR’s report serves as a wake-up call for policymakers to address the risks posed by the country’s over-reliance on China and to take proactive steps to secure the UK’s energy future.
