Written evidence from Livent (DEV0049)

Livent UK BEIS Submission

 

Introducing Livent

 

  1. Livent welcomes the opportunity to submit its observations to the Business, Energy and Industrial Strategy Committee on the supply of batteries for electric vehicle manufacturing and the viability of battery manufacturing for electric vehicles in the UK.

 

  1. Livent is a world leader in lithium technology and one of the largest global lithium producers. Its headquarters are in Philadelphia, USA. Its main European manufacturing site is located in the UK in Bromborough, Merseyside. As the largest lithium production site in the UK, Livent is a considerable contributor to the UK’s chemicals industry.

 

  1. Through its day to day business operations, Livent regularly interacts with battery manufacturers in the UK. Livent strongly supports the development of the battery manufacturing for electric vehicles industry in the UK.

 

With the right regulatory framework, the future for the UK electric vehicle battery manufacturing is bright

 

  1. The UK has a long and rich history of manufacturing cars. Many companies that led the way in innovating and transforming the automotive industry have originated from Britain. Today, over 182,000 people are employed in the UK automotive industry and the industry contributes over £14 billion to the UK economy each year.

 

  1. As the UK looks towards meeting its net zero goals, it is only natural for the UK’s automotive industry to move towards increasing its production of electric vehicles. This relies on easy access to electric vehicles batteries, the majority of which are made from lithium.

 

  1. With global demand for the minerals used in electric vehicle batteries projected to increase between six and thirteen-fold by 2040, and with lithium prices constantly on the rise, it is vital that the UK remains an attractive destination for the import and processing of lithium if it is to achieve Net Zero targets, such as ending the sale of vehicles with internal combustion engines by 2030.

 

  1. In July 2022, the government launched its Critical Minerals Strategy, which aims to increase the domestic production of critical minerals including lithium, in recognition of their vital role in the transition to net zero.  In this strategy, the government said that 100,000 jobs could be added to the UK automotive and electric vehicle battery ecosystem by 2040, but that is dependent on the development of the UK’s domestic battery manufacturing capabilities.

 

  1. Creating a healthy UK battery industry will need a regulatory framework that enables the domestic production, processing and recycling of lithium.

 

 

 

UK REACH can be a crucial factor for the growth of UK domestic battery manufacturing capabilities

 

  1. The lithium industry is highly capital intensive and this makes it crucial for the UK to ensure that it adopts the right regulatory conditions so as not to deter investment. The recent collapse of Britishvolt is an example of the difficulties many companies face in overcoming these challenges.

 

  1. Industry leaders across the entire UK automotive and electric vehicle battery ecosystem recently warned that the UK faced several challenges in maintaining its competitiveness with other car making countries, calling for the government to increase its support in the transition to electric vehicles and to help strengthen supply chains.

 

  1. The right regulatory framework can be a crucial factor in strengthening the competitiveness of the UK industry. The implementation of UK REACH is a clear opportunity in this regard: the UK has the chance to boost the investment and innovative capacity for production and use of chemicals that are safe and sustainable by design. A regulatory framework based on a weight-of-evidence approach that considers the best available science should open doors for key minerals and support resilience of supply in a world where sovereignty on resources is likely to become an increasing issue.

 

  1. The implementation of UK REACH and the associated ability to diverge from EU regulation also means there is potential to help the UK cultivate new industries and support the development of new technologies that will be essential for the transition to Net Zero, especially in instances where the EU may have issued disproportionate classifications that inhibit growth, increase uncertainty and unduly augment the regulatory burden for industry.

 

  1. However, the newness of the regulatory framework creates several uncertainties for businesses such as Livent, particularly in relation to the timeline for classification of chemical substances and the as yet untested appeals process. Clarifying these elements and creating a robust and reliable regulatory framework will be vital to ensuring the UK is successful in attracting inward investment in battery manufacturing.

 

To foster the electric vehicle battery manufacturing industry, regulatory decisions must be made based on a weight of evidence approach that also assesses socioeconomic aspects

 

  1. Regulatory uncertainties over the status of critical minerals needed for electric vehicle batteries contribute to rising costs across the supply chain that deter investment in production, make it more expensive for manufacturers and contribute to the current difficulties the industry is facing.

 

  1. The Health and Safety Executive (HSE), the agency responsible for overseeing post-Brexit chemical regulatory regime for Great Britain, is currently reviewing its opinion on lithium after the European Chemicals Agency Risk Assessment Committee (RAC) proposed to classify three lithium salts as a reproductive toxin There has been significant debate around the scientific basis for a potential classification by the EU with the HSE noting in its  technical report on lithium in August 2022 that EU experts had failed to consider all available evidence. The HSE called for further assessment to occur before it forms its opinion.

 

  1. An approach to the assessment of the classification of chemicals which emphasises the weight of evidence is paramount. Classification decisions can lead to increased regulatory burdens or costs to industry that may deter investment and ultimately harm citizens, so it is of utmost importance that such classifications are grounded in good science.

 

  1. In addition to solid science, regulatory decisions need to take into account socio-economic aspects. Lithium is essential to key industries including the electric vehicle battery manufacturing industry which in turn bring highly skilled jobs to the UK. Without lithium, it will be virtually impossible for the UK to achieve its Net Zero targets.

 

Conclusion

  1. Good science is vitally important for building and maintaining regulatory regimes that support the growth of industries such as electric vehicle battery manufacturing. Without sound scientific foundations underpinning policy, such industries could face unnecessary barriers, which will hurt the UK economy as a whole.

 

  1. The UK is in a unique position where it can learn lessons from other already well established systems for chemical regulation. It will be essential to ensure that decisions are based on a solid methodology and strike a balance between the imperative of ensuring health and environmental safety while not posing undue burdens that would harm business or investment opportunities.

 

  1. Through implementing a fact-based and forward-looking new system for the regulation of chemicals, the UK has an opportunity to give industry the certainty it needs to invest in the UK and enable investment across the electric vehicle battery supply chain.