January 13, 2025

Energy Security and Net Zero Committee

House of Commons

London SW1A 0AA

Dear Mr Esterson,

Fortescue welcomes the opportunity to provide evidence for the Workforce Planning to Deliver Clean, Secure Energy Inquiry led by Energy Security and Net Zero Commons Select Committee.

Fortescue is the technology, energy and metals group accelerating the commercial decarbonisation of industry, rapidly, profitably and globally. Driven by our unique values, we’re showing the world that we can achieve Real Zero. Real Zero means no fossil fuels and no offsets in our mining operations.

In the UK our team of over 1,300 staff are developing and manufacturing high performance zero emission power systems for ultra large offroad electric vehicles. These systems are used in sectors such as ultra-heavy haulage, cranes, rail and marine, and are at the forefront of electric vehicle technology and engineering and are critical to the decarbonisation of these hard to abate sectors.

As a major exporter and investor, we engage closely with the Department for Business and Trade, Department for Energy Security and Net Zero, and other investment and trade focused entities within the UK Government. Most recently this has been around plans to expand our Oxfordshire manufacturing site into a full gigafactory. The facility would produce 100s of millions worth of exports for the UK-AUS FTA and would help to safeguard the UK Off-Highway vehicle manufacturing sector. The expansion would also solidify our position as a strategic investor, an exporter and a key player in the UK automotive sector.

Most of current Fortescue Zero production falls into Non-Road Mobile Machinery (NRMM) sector which is worth over £17.6B (2022) with over 83% of revenue from export and employing around 100,000 people (~31,000 direct and 68,000 indirect). According to the Automotive Council report, “Transition to Zero Heavy Duty Workstream” (2023), UK engine production for OHVs is higher than UK engine production for on-road commercial vehicles. NRMM accounts for 9.9 million tonnes of C02 per year, which is 2.15% of total UK CO2 emissions, or approximately half as much as total on-road HGV CO2 emissions. This makes NRMM one of the largest single sources of CO2, and a sector where the UK is a technology leader. Hence NRMM is not only a key subsector for the UK but also offers a unique opportunity for the UK to become a leader in providing electric powertrains to international markets.

We believe that a holistic approach to regulations, investment support, green skills and market acceleration is key to the UK becoming a leader in net zero technologies and transition to clean power by 2030. In our submission we outline the key barriers to green skills investment in the UK, recommend key policy solutions and share our views on what actions would help the UK to achieve a true step change in the employer investment into green skills. We also outline the key features and benefits of the Australian Skills Sharing Visa Programme which could be adapted by the UK.

Our team will be delighted to discuss any of the issues raised in this submission or to arrange a briefing, please contact edita.sawyers@wae.com or myself on the below details. 

Yours sincerely,

Daniel Worrall

Head of Group Government Relations

Significant Barriers to Investment Related to People and Skills – Green Energy UK

The green energy sectors—specifically in battery technology, electric vehicles (EVs), and energy storage—are rapidly evolving, and with this growth comes a significant need for specialised skills. However, there are several skills gaps that exist, both in the UK and globally, addressing these gaps is crucial for accelerating the green transition and ensuring that the workforce can meet the demands of these high-growth sectors.

The skills gaps in the green energy sectors—particularly in battery technology, electric vehicles, and energy storage systems include areas such as materials science, powertrain engineering, vehicle integration, digital technologies, and sustainability. However, the three key ones for EVs are:

•          Battery cell integration engineering

•          Industrialisation, from R&D to manufacturing

•          Battery software and battery management systems

Closing these gaps will require targeted investments in education, vocational training, and professional development, alongside stronger collaborations between industry and academia.

1. Skills Gaps and Workforce Development
As companies and organisations push for rapid scaling of green technologies, there is a growing demand for skilled workers in areas such as energy storage, sustainable manufacturing, and electrification. In particular, the fast-growing field of electric vehicle (EV) battery development and Formula E technology presents a high demand for technical expertise across several disciplines, including battery chemistry, power electronics, and vehicle design.
However, there is a lack of a sufficiently skilled workforce to meet this demand, particularly in advanced sectors such as battery technology and energy storage, where specialised training is currently underprovided by the UK education system. It is also much harder to bring in skilled workers post-Brexit, which is a major issue to a global industry like automotive. That is another reason to invest elsewhere.

2. Mismatch Between Education and Industry Needs
Many educational institutions are not yet fully aligned with the rapidly evolving needs of emerging sectors like electric mobility, battery technology, and energy storage. While traditional disciplines such as mechanical engineering, electronics, and manufacturing management are taught, curricula often do not focus on the specific skills needed in the growing EV and clean energy sectors. In particular, the electric vehicle industry requires expertise in areas like high-performance battery systems and energy management fields that are often underrepresented in traditional engineering education.

3. Limited Career Pathways and Awareness
Existing career advice and guidance systems often do not fully support entry into emerging sectors, such as sustainable automotive engineering or the renewable energy storage industry, leaving many potential candidates unaware of available opportunities.

4. Retention of Skilled Workers
Increasing demand for engineers and a limited supply inevitably leads to bidding wars and high staff turnover – not good for the long-term health of the economy.

Key areas that need more highly skilled engineers are:

•          Electric Vehicle & Battery Technology

•          Manufacturing & Robotics / Mechatronics

•          Mechanical and Civil Engineering (retraining to become aligned with needs of zero emission technology)

Evidence to Illustrate Barriers

Industry Surveys and Reports

•          Reports from organisations such as the Engineering Council and the Energy and Utilities Skills Partnership highlight the significant skills gaps across green energy sectors. For example, the UK government's Energy White Paper has identified a need for 40,000 skilled jobs to be created in the clean energy sector by 2030 to meet the UK’s climate goals, with many of these roles linked to energy storage and electric vehicle technologies.

   Investment Delays

•          Delays in the deployment of key clean technologies, including energy storage and electric vehicle infrastructure, are often attributed to a shortage of skilled workers. Companies in the UK’s clean tech sector have struggled to find qualified engineers to support the rapid scaling of battery manufacturing and EV development. These delays increase costs and pose a significant barrier to attracting further investment.

                Skill Shortage Studies

•          The Green Alliance's "Skills and Employment in the Green Economy" report found that 90% of employers in the renewable energy and low-carbon sectors cited a lack of suitable skills as a barrier to growth, with specific shortages in technical roles related to energy storage, EV technology, and sustainable manufacturing.

UK Government Policy Solutions

To address these barriers, the UK government could implement the following policies:

1. Curriculum Reform and Industry Partnerships
The government should work closely with educational institutions and industry leaders to align curricula with the skills needed in green technologies like energy storage and electric vehicle development. This could involve creating specialised courses in battery technology, sustainable automotive engineering, and energy systems management. Partnerships between universities, vocational colleges, and businesses like Formula E teams could help provide hands-on, industry-relevant training to students.

2. Apprenticeships and Vocational Training
Expanding apprenticeships, traineeships, and other vocational pathways into green industries is essential. Specific focus on technical apprenticeships in battery engineering, electric vehicle design, and energy storage would help bridge the skills gap. Additional funding for apprenticeships targeting these emerging sectors should be prioritised.

3. Skills Retraining Programs for the Existing Workforce
Incentivising businesses to invest in continuous professional development (CPD) programs will help upskill the existing workforce. Policies that support lifelong learning, such as tax incentives for businesses investing in training related to battery technology or electric vehicle development, would facilitate smoother workforce transitions into green industries.

4. Regional Skills Hubs and Green Job Support
Establishing regional "green skills hubs" could provide specialised training and support for local communities. These hubs could be centred in areas with strong academic and innovation bases, like Oxford or Coventry, where local industries and universities could collaborate to deliver targeted programs in battery technology and EV development.

5. Public-Private Partnerships for Workforce Development
The UK government could foster public-private partnerships to create large-scale workforce development programs. For example, collaborations with companies in the electric vehicle sectors could fund training programs specifically tailored to emerging technologies in battery development, energy storage, and sustainable transport systems.

6. Attracting International Talent
To address the global shortage of skilled workers, the UK government could streamline visa processes for highly skilled workers in energy and engineering fields. Attracting international expertise could help address immediate skills shortages while long-term solutions like education reform and apprenticeships are implemented.

International Best Practice: Skills Sharing Visas in Australia, Overview and Potential Application at Fortescue Zero in the UK

In Australia, Skills Sharing Visas are designed to facilitate the movement of skilled professionals between countries to help address workforce shortages, particularly in areas where there is a high demand for talent in emerging industries such as clean energy, technology, and infrastructure. These visa programs allow businesses to bring in skilled workers from overseas temporarily or permanently, to fill specific roles that are hard to recruit for locally.

One prominent example is the Temporary Skill Shortage (TSS) visa (subclass 482), which enables Australian employers to sponsor skilled foreign workers for roles in various sectors, including renewable energy, engineering, and technology. This visa program is part of Australia’s broader strategy to address skills shortages, particularly in green energy sectors like battery technology, energy storage, and renewable energy infrastructure.

Key Features of the Australian Skills Sharing System

• Short-Term and Medium-Term Occupation Lists: The TSS visa allows for the import of skilled workers in fields that are experiencing significant shortages. For green energy sectors, these might include roles in battery development, renewable energy engineering, and other clean tech professions.
• Employer Sponsorship: Employers like Fortescue Zero can sponsor skilled workers from overseas, bringing them in to fill roles that require expertise not readily available in the local workforce.
• Skills and Qualifications Recognition: Australia also has frameworks in place to ensure that foreign workers' qualifications are recognised, including specific criteria for those in the energy, engineering, and technology sectors. This ensures that those recruited are qualified to meet the standards set by the local industry.

Potential Benefits of a Skills Sharing Visa System in the UK:

Filling Talent Gaps

•          By tapping into the international talent pool, companies could fill critical skills gaps in emerging technologies.

Fostering Innovation

•          Encouraging knowledge exchange and cross-border collaboration can drive innovation within companies, particularly in high-tech fields like battery and power electronics technology.

Strengthening the UK’s Clean Energy Ecosystem

•          By introducing international talent and expertise, companies could help foster a more robust clean energy ecosystem in the UK.

Achieving a Step Change in Employer Investment and Training

To achieve a step change in employer investment in training, especially in growth-driving sectors like clean energy, manufacturing, robotics, mechatronics and decarbonisation, several bold and targeted actions could be implemented by both the UK government and private sector stakeholders. Here are some key strategies that could incentivise and accelerate employer investment in skills development:

1. Incentivise Employer Investment with Financial Support

Tax Incentives and Subsidies

•          The government could introduce more generous tax credits or subsidies for companies that invest in training their employees, particularly in emerging sectors. For instance, employers could receive financial incentives for offering apprenticeships, paid internships, or funding employees’ participation in accredited training programs related to green technologies or decarbonisation.

Co-Funding Models

•          The government could implement co-investment models where they partner with businesses to fund training initiatives. For instance, if a company contributes a certain amount to skills development, the government could match it with additional funding, particularly for niche or technical areas like hydrogen production, green energy, and sustainable manufacturing.

Sector-Specific Training Grants

•          Offering direct grants to businesses in specific growth sectors (e.g., green energy, manufacturing) for the purpose of training employees in emerging technologies could remove some of the financial barriers to investment in workforce development.

2. Encourage Long-Term Commitments to Skills Development

Employer-Led Industry Standards

•          Industry associations or consortiums of businesses within specific sectors (like the green tech sector, automotive, or robotics) could create shared training standards. Employers could collectively fund and participate in joint training initiatives to ensure that workers are equipped with the skills necessary for the future. This could lower the burden on individual companies while ensuring consistency and quality in training across the sector.

3. Foster Public-Private Collaboration for Training Innovation

Public-Private Skills Partnerships

•          By creating sector-specific skills councils or partnerships (similar to the Energy and Utilities Skills Partnership), government, industry, and education institutions could work together to design and deliver targeted training programs. These partnerships could align training with the exact needs of the industries they serve and ensure that the training pipeline matches the demand for talent in growth-driving sectors.

Corporate-led Research and Development in Training

•          Companies could be encouraged to invest in R&D related to training technologies and platforms that focus on skill-building for the green economy. This might include simulation-based learning, virtual reality (VR) training for robotics, or AI-powered platforms that adapt to the unique needs of individual learners in the energy sector.

4. Enhance the Role of Apprenticeships and Vocational Training

Incentivising the Expansion of Apprenticeships in Green Industries

•          The government could offer higher subsidies or tax credits for businesses that provide apprenticeships in green sectors. These could be aimed at emerging technologies such as clean energy (wind, solar, hydrogen), electric vehicle manufacturing, and sustainable construction. Creating clear, industry-recognised certification programs for apprenticeships can make these roles more attractive to young people.

Employer-Run Training Schemes

•          Encourage large employers in key sectors (e.g., Fortescue Zero, Siemens in the green energy sector) to create internal training academies or programs that offer both formal qualifications and on-the-job experience. The government could offer financial incentives to firms that commit to running large-scale, high-quality training schemes for new employees.

5. Expand Access to Lifelong Learning and Skills Transition Programs

Upskilling and Reskilling for Transitioning Workers

•          The government could implement policies that support transitioning workers into the green economy. For instance, if employees are displaced from traditional sectors like fossil fuel-based industries, targeted retraining programs could be implemented, with businesses encouraged to partner with training providers to facilitate reskilling efforts. The government could provide direct subsidies or tax breaks to employers that help workers transition into new green roles.

"Green Job Guarantee" Schemes

•          Government and industry could collaborate to create "Green Job Guarantee" schemes, where workers are guaranteed access to training and job placement in green industries, such as clean energy, sustainable construction, and advanced manufacturing. This would provide both employees and employers with a clear framework for investing in training, with the assurance of post-training employment opportunities.

6. Create Regional Skills Hubs Focused on Growth Sectors

Local Skills and Training Ecosystems

•          The government could establish regional innovation hubs or green skills clusters across key areas in the UK (such as Oxford, Manchester, or Glasgow) that specialise in training for the green economy and other growth sectors. These hubs would bring together local employers, universities, training providers, and government agencies to address local skills shortages and ensure that regional workforces are aligned with the needs of emerging industries.

Dedicated Training Institutes for Emerging Sectors

•          The government could fund or co-fund the creation of specialist training institutes for sectors like renewable energy, hydrogen technologies, and robotics. For example, an institute dedicated to green hydrogen education could partner with companies like Fortescue Zero to ensure a steady supply of trained talent.

7. Develop a National Skills Strategy for Green Growth

National Framework for Green Jobs

•          A clear national strategy for growing green jobs in sectors like renewable energy, electric vehicles, and sustainable manufacturing is critical. The government could create a comprehensive roadmap that identifies key sectors where skills gaps exist and develop a long-term plan for closing these gaps through targeted investment in training.

Aligning Skills Strategy with Green Financing

•          One key step could be integrating a "skills and training" element into green finance initiatives. For example, government-backed green bonds could allocate funding for worker retraining programs or new educational initiatives for clean tech sectors. This would ensure that public funds invested in the green economy are matched by a commitment to a skilled workforce.