The U.K. is poised to unveil plans to boost green manufacturing, as it seeks to lure investment in a new battery plant from Jaguar Land Rover parent Tata Group.
The government’s “Advanced Manufacturing Plan” will form part of the U.K. response to U.S. President Joe Biden’s $369 billion package of green subsidies and tax credits, three people familiar with the plan said.
Ministers including Energy Secretary Grant Shapps have expressed concerns that the American plan — and the European Union response to it — risked triggering protectionism.
Prime Minister Rishi Sunak’s government is seeking to address the danger to Britain’s green industries posed by business incentives abroad which threaten to draw investment away from the U.K. as it gets squeezed between two larger economic powers.
Tata’s decision will provide an early test of post-Brexit Britain’s ability to attract flagship investments.
The Indian conglomerate is nearing a decision to pick Spain or the U.K. for a battery plant that will supply Jaguar — a British automaker.
But one U.K. official said there are concerns Spain will win out, and an industry official said Spanish authorities are convinced they have clinched the investment, while cautioning that nothing is set in stone.
U.K. officials have also raised fears that Drax Group may divert 2 billion pounds ($2.43 billion) of planned investment in carbon capture to the U.S.
All officials familiar with the matter spoke with Bloomberg on condition of anonymity because neither the U.K. government’s plans, nor Tata’s decisions have been made public.
When it comes to stimulating green investment, Treasury officials have privately conceded they cannot come close to matching Biden’s measures.
And while they concede the U.K. does not have a significant green manufacturing base to protect, they are increasingly worried potential investment may be diverted to the U.S.
Ministers, led by Business and Trade Secretary Kemi Badenoch are still working through the details of the manufacturing plan, but measures are likely to center on deregulation until funding commitments are made by Chancellor of the Exchequer Jeremy Hunt in his Autumn Statement, one person said.
The new U.K. plan will focus on securing supplies of critical minerals, as well as battery and electric-vehicle production, two people said. Badenoch is also working to reduce energy costs for those industries, they said.
‘Green Day’
It will form the center piece of what is being described internally as “Green Day,” which has been penciled in for the end of March.
That is also likely to feature an updated Energy Security Strategy, the launch of the U.K.’s nuclear power plan, and a response to a recent review which criticized the government for not doing enough to invest in projects that benefit the economy and climate, people said.
The attempt to attract Tata follows the collapse of homegrown battery hopeful Britishvolt earlier this year.
Last month, its administrators selected Australian startup Recharge Industries as the buyer for the majority of the insolvent company’s business and assets.
Recharge says it plans to focus on building stationary batteries that are used to store energy first, before branching out into EV cell manufacturing.
In a potential boost to the domestic auto industry, BMW said this week it’s making progress on securing subsidies from the U.K. to build electric Mini models at its Oxford factory.
The Conservatives have been in power since 2010 and have been criticized by the Labour opposition for overseeing a decline in manufacturing.
Former Prime Minister Theresa May published an industrial strategy in late 2017, but her successor, Boris Johnson, scrapped it in early 2021.