Net zero at risk in ‘wake-up call’ for West
Britain and Europe risk becoming dependent on China to hit net zero without a massive increase in battery production, the International Energy Agency has warned.
Its latest report on the global growth in battery technology warns that China has cornered the market by controlling 85pc of production capacity.
That is alongside China’s dominance in the extraction and processing of critical minerals for batteries, as well as the facilities needed to produce car components such as anodes and cathodes.
Findings from the IEA indicate that batteries will play a key role in cutting global emissions, but warned that the West must expand production facilities or risk becoming reliant on potentially hostile foreign powers.
The report said: “China dominates the battery supply chain with nearly 85pc of global battery cell production capacity and substantial shares in cathode and anode active material production.”
Angus MacNeil MP, chairman of the energy security and net zero committee, said the IEA’s report must serve as a “wake-up call in the West”.
He said: “We have seen what happens when all eggs go into the one energy basket. While no two sources or energy types are the same, there is a broad risk of having battery production in the monopoly of one state.
“Relations with China are such that things could easily be tricky in future, it might keep relations more stable if the reliance wasn’t one way.”
The IEA report coincides with new figures from the Society of Motor Manufacturers and Traders showing that UK car production fell 27pc last month to 59,500.
Batteries are rapidly becoming an essential part of global energy supplies, particularly in transport where they are critical for electric vehicles.
Lithium-ion batteries are also a cornerstone of modern economies by powering laptops, mobile phones and other equipment.
Fatih Birol, the IEA’s executive director, said battery technology was essential to cutting carbon emissions: “The combination of solar and batteries is today competitive with new coal plants in India.
“And just in the next few years, it will be cheaper than new coal in China and gas-fired power in the United States. Batteries are changing the game before our eyes.”
However, the report warns that China’s dominance in battery technology is also giving it control over related products, such as electric vehicle production
It said: “In China, we estimate that more than 60pc of electric cars sold in 2023 were already cheaper than their average combustion engine equivalent. However, electric cars remain 10pc to 50pc more expensive than combustion engine equivalents in Europe and the United States.”
The report warns that China’s dominance in the battery sector also extends to the much larger components used in the power sector, for example, to store surplus power generated by wind and solar.
Last year alone China installed around 22 gigawatts of battery storage - equivalent to a third of the UK’s entire generating capacity. All of those batteries were made in China.
By comparison, the UK added about one gigawatt of battery capacity.
A spokesman for the Department for Energy Security and Net Zero said: “We are building up resilient international supply chains that give domestic businesses the long-term certainty they need.”
