90,000 UK jobs at risk as over-reliance on China leaves energy supply chains exposed, warns IPPR

• 90,000 UK jobs at risk as over-reliance on China leaves energy supply chains exposed, warns IPPR
• Shocks to battery supply chains could cost tens of thousands of automotive and clean energy jobs
• UK could face an additional annual £1.5bn gas import bill if supply chain issues delay solar rollout

IPPR recommends a plan for energy resilience, including investing in UK clean energy production, diversifying supplies and building stockpiles

Up to 90,000 jobs in the automotive and battery sectors could be jeopardised if key supply chain components are disrupted, according to new analysis by The Institute for Public Policy Research (IPPR).

IPPR modelling shows that tens of thousands of jobs could be lost if the UK’s main source of battery components were to face a year-long interruption, which could also wipe out production of more than 580,000 electric vehicles.

Disruptions to the supply of key products such as batteries, solar panels, steel, and critical minerals would slow the rollout of clean energy technologies and threaten industries vital to regional economies - putting jobs in areas hardest hit by industrial decline at risk.

Delays to solar rollout and continued dependence on gas could also cost the UK an extra £1.5 billion a year unless decisive action is taken to secure clean energy supply chains.

Recent crises have demonstrated the fragility of global industries. The Covid-19 pandemic showed how quickly disruptions can ripple through to households and the workforce, while the Russia–Ukraine war has added further instability and driven up energy prices.

The world’s over-reliance on China exacerbates these risks. The report highlights that 80 to 90 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. This is particularly the case in a world of escalating trade tensions where restrictions on energy-related products are increasingly used as a strategic tool.

In order to build resilience against disruptions to supply, IPPR urges the government to:

• Set out a clear position on Chinese investment and involvement within priority supply chains in order to help businesses plan.  
• Support domestic production: invest in UK factories for batteries and green steel to reduce reliance on imports.
• Invest in alternative supply: work with allies to invest in new solar, battery and critical minerals production sites across a greater range of countries.  
• Build international stockpiles: work with allies to pool resources and build up buffer stocks of solar panels to avoid project delays when there is a shock.  
• Drive innovation to hunt for new materials and products that reduce our reliance on the critical minerals most at risk from supply disruptions.

Strengthening the UK’s clean energy supply chains is not an exercise in protectionism but a pragmatic response to a turbulent global economy, the report says.  

A resilient approach would also position the UK as a credible partner in global clean energy efforts. Working with other countries through initiatives such as the Global Clean Power Alliance could help drive investment, coordinate demand, and build stockpiles of key components. By pooling resources, the UK and its partners could strengthen supply chain resilience, support jobs and growth, and safeguard energy security for all members.

Pranesh Narayanan, senior research fellow, said:  

“The UK is a small open trading nation sailing through an international economy whose waters are getting choppier by the day. Trump’s trade war with China, the rise of conflicts around the world – these shocks ultimately hurt the UK economy because we rely so much on trade to source the essentials, including clean energy technologies. Rachel Reeves recognised this when she spoke about ‘securonomics’ and the need for resilience. We’ve set out several steps for how the government can do this through international investment and partnership.”

Laura Chappell, associate director for international policy, said:  

“As the government reshapes the FCDO, resilience must be at the heart of its mission. Diplomats should be working to build partnerships that will underpin Britain’s future energy security. These can be win-wins, supporting the UK and its partners to make the most of their resources, generating jobs and growth.”

ENDS

Laura Chappell and the report’s authors, Pranesh Narayanan and Simone Gasperin, are available for interview  

CONTACT

Rosie Okumbe, digital and media officer: 07825 185421 r.okumbe@ippr.org  

David Wastell, director of news and communications: 07921 403651 d.wastell@ippr.org  

NOTES TO EDITORS  

• The IPPR paper, Resilient by design: building secure clean energy supply chains, by Simone Gasperin, Pranesh Narayanan and Sofie Pultz, will be available for download at https://www.ippr.org/articles/resilient-by-design  
• Advance copies of the report are available under embargo on request
• Methodology:  
  • The estimate that up to 90,000 UK jobs are at risk comes from modelling a one-year disruption to imports of key battery components (cathodes and anodes). This is based on the Faraday Institution’s projections of UK electric vehicle and battery production and employment. We calculate the impact by estimating the potential shortfall in battery components if the UK’s largest import source for these products is lost and assuming that production falls in proportion to this shortfall.
  • The estimate that the UK could spend an extra £1.5 billion a year on natural gas reflects the additional imports needed if disrupted solar panel supplies slow the rollout of solar power, as indicated by the government's 2030 target. We convert the resulting shortfall in installed solar capacity into lost electricity generation, then into the extra gas-fired generation required to fill that gap, and finally value this using recent average wholesale gas prices.
• IPPR (the Institute for Public Policy Research) is the UK’s most influential think tank, with alumni in Downing Street, the cabinet and parliament. We are the practical ideas factory behind many of the current government’s flagship policies, including changes to fiscal rules, the creation of a National Wealth Fund, GB Energy, devolution, and reforms to the NHS. As an independent charity working towards a fairer, greener, and more prosperous society, we have spent almost 40 years creating tangible progressive change - turning bold ideas into common sense realities. www.ippr.org