In the short time I have, I will focus my comments on vehicle propulsion, but first I draw on the comments from my right hon. Friend the Member for Camborne and Redruth (George Eustice) and the right hon. Member for Leeds Central (Hilary Benn) that the cost we pass on to the public must be minimised. I hope the Minister will take note of the points about the hydrogen levy before Committee stage. It is misguided and it is in the wrong place. We have to take the public with us on this—we cannot keep adding to people’s bills to try to make things work. I hope the Minister will take that point away.
Much has been said about energy security and trying to get away from the situations we face with Russian gas, fossil fuels and so on, but I am concerned that we are moving into another area of energy dependence on another autocracy or dictatorship, China. I raised this point with the Secretary of State earlier, and he focused on uranium, but that was not what I was getting at. China has sucked up the processing of many of the materials in the world that are needed to make renewable energy. According to statistics put forward by Morgan Stanley, China refines 59% of the world’s lithium, 80% of the cobalt, 69% of nickel sulphate, 95% of magnesium, 100% of spherical graphite, 69% of synthetic graphite, as well as producing 70% of battery cells, 78% of cathodes and 91% of anodes.
To build on that, the Mercator Institute for China Studies, a German think-tank, says about nickel processing in Indonesia:
“In 2014, Indonesia banned the export of unprocessed nickel, prompting a wave of Chinese investments seeking to secure battery materials. With China’s help, Indonesia plans to boost its share of global nickel production from 28 to 60 percent… Already several multi-billion USD nickel-focused industrial parks are sponsored by Chinese companies.”
On cobalt in the Democratic Republic of Congo, MERICS states:
“The DRC is home to over half of the world’s cobalt reserves and was responsible for two-thirds of mined output production in 2020. Chinese companies control up to 70 percent of the Congolese mining portfolio, but mining contracts…are under review by the DRC.”
MERICS also comments on the Lithium Triangle,
“a region around the borders of Argentina, Bolivia and Chile. It is thought to hold around half of the world’s lithium reserves. Between September and November 2021 alone, four separate Chinese companies announced acquisitions cumulatively worth USD 1.2 billion.”
That is the reality we live in today. A parallel can easily be drawn to what a hostage to fortune it could be if an autocracy or dictatorship took a direction we were not happy with. We have seen that happen in terms of fossil fuels with Russia.
So what do we do about it? The Bill makes some progress here, but I think we must come up with another technology that can work alongside electric vehicles. I want to draw attention to the fact that we do not put enough energy into hydrogen combustion. There is a lot of research going on. I am a big motorsport fan and I have been taking the magazine “Autosport” for over 30 years, so I will quote from its engineering supplement on 16 March 2023:
“‘People think hydrogen infrastructure is complicated and it doesn’t have to be if you look at it in stages,’ reckons Cosworth CEO Hal Reisinger, his company one of many including ORECA to have invested in hydrogen test cells. ‘Internal combustion engines can be very easily converted to hydrogen; put different injectors in, remap the ECU and there’s this entire infrastructure of engines that are available. It’s much easier to establish a hydrogen infrastructure than an electric infrastructure.’”
There are indeed great demands coming if we want to achieve the target number of electric vehicles. By the Government’s own estimate, the global demand for electric vehicle battery materials is projected to increase by between six and 13 times by 2040 under stated policy. World copper production has to double to be able to meet production policy, yet there was a report only last week that not enough new mines are being exploited to reach the current copper production level.
Hydrogen combustion does have issues. The compression of the hydrogen has to be 700 bar. There are questions about how we manufacture and store it. If we get the technology wrong. it produces dangerous levels of nitrogen oxide. That will have to be addressed, and so will the weight.
However, my argument is that there is an alternative that technically can work. I know that other companies, including JCB, have done a lot of research into it. I urge the Minister, when we are looking at development budgets, to start to put some hydrogen combustion development in there. We could refocus the automotive transformation fund, which perhaps has been too focused on electric vehicles and needs to look at other areas. There is a geopolitical and geostrategic effect that is occurring after some of these policies have been written, and we must be able to adapt and move along.
Every hon. Member in this Chamber wants to move towards a net zero society, but if we do not do so sustainably, taking the public with us, we will find that harder and harder to do, as my right hon. Friend the Member for Camborne and Redruth outlined with regard to the buying of gas boilers making the situation worse. Recognising that the supply of the rare earth elements that are needed may provide hostages to fortune with countries such as China, I urge my hon. Friend the Minister to look into how the Government can help companies to research and develop hydrogen combustion.
7.59 pm