Green energy shift gives China ‘leverage’ over Britain, Lords warn

Overreliance on Beijing's critical minerals market is a 'national security concern'

Britain risks becoming in thrall to Beijing due to its growing reliance on renewable energy, a new Lords report has warned.

A House of Lords committee warned that Britain is becoming too dependent on China for the supply of rare earth elements used to manufacture wind turbines and components for solar panels.

China’s control over the global industry creates “new risks” as it leaves Britain at the mercy of Beijing for supplies.

The Lords committee warned that Xi Jinping could use rare earth mineral supplies as “leverage” in negotiations over other issues. Jason Bordoff, of the Columbia Climate School, told the committee China's dominance in the critical minerals market was a "national security concern" and said the Government should work to reduce the nation's reliance on Chinese exports.

The Economic Affairs Committee issued the warning in a report on how the Government can secure the nation's energy supply while delivering on promises to combat climate change.

The committee recommended more investment in the North Sea to deliver domestic supplies of oil and gas and encouraged policy measures to boost private investment in renewables.

But it warned that the country faces "new dependencies" with the shift to renewables as Western nations push ahead with plans to end imports of Russian gas. 

China provides around 98pc of the EU's requirement for rare earth metals used to build batteries, smartphones and offshore wind turbines. The minerals are mined in many countries but Beijing has invested in the infrastructure required to process and export them globally.

Former Bank of England Governor Mark Carney warned the Lords committee in April that China had "given a lot of thought and taken a lot of actions to secure supply" of key materials.

He said: "There are issues with supply chain concentrations. A lot of the technology and production comes out of China, so there is a heavy exposure to China, certainly in new solar, and there are heavy concentrations in rare earths and minerals, as you are aware. 

"In fact, there is very clearly insufficient global investment in those materials for the scale of the transition that is required, not just in the UK but more broadly, so there are security of supply issues there that need to be addressed and thought through.

"Having reliable supply chains for these critical minerals should be one of the top priorities for energy security, or else we will not be able to build out the sustainable platform that we need to marry security and sustainability."

The report said the Government's upcoming critical minerals strategy should assess vulnerabilities in the supply chain and determine how to minimise them. 

The committee advised the Government to launch talks with the financial and industrial sectors to determine whether new supply chains could be built, how long it would take to deliver alternatives to Chinese products, and whether moving away from Chinese supplies would increase the cost of renewable energy.

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