£4.8b - the economic mileage for the UK in EV batteries as the Humber hots up

By Scunthorpe Telegraph | Posted: 7 May 2019

A £4.8 billion opportunity for the UK chemical sector has been identified in battery manufacture for electric vehicles.

The figure comes from a report just released, and looks purely at the market share by 2030 to meet the needs of UK-built vehicles alone.

Phillips 66’s Humber Refinery is already part of the supply chain feeding in vital elements to support 500,000 new cars, with its high grade graphite coke.  It has put in the hard miles to bring it to the huge growth sector.

Formulated by the dedicated South Killingholme team - working alongside the company’s US-based research and development operations in Oklahoma - the premium product is a core part of lithium ion batteries.

Refinery boss Darren Cunningham, pictured above, has already told Humberbusiness.com how he hopes it could add to the region’s Energy Estuary offer, acting as a cornerstone for UK input. 

Chinese manufacturer BYD has already committed to a North Bank energy park, with high growth micro-generation and charging solution provider MyEnergi looking to expand into North East Lincolnshire too, with financial backing from some of Britain’s brightest business brains, including former Tesco chief executive Sir Terry Leahy.

David Talbot, chief executive of Catch, the public/private sector organisation supporting the process industry cluster, said: “This report should be welcomed by the Humber region as it resonates with the work being undertaken by Catch, the Humber LEP, the University of Hull through Aura, Bondholders and business to support the decarbonisation agenda. 

“The idea that nearly all vehicles should include a degree of battery power by 2030 is an exciting prospect and one that needs to be grasped by the region and nationally. Clearly this will be good news for the Phillips 66 Humber Refinery with their capability to produce graphite for the battery industry which is an excellent example of how the petrochemical industry is diversifying.  “Seeing collaboration between key sectors such as the chemistry and automotive industries is a huge step in delivering the Industrial Strategy.”

Following a deep assessment of the current capability to support the development and growth of the UK’s battery manufacturing industry, the forecasts are based upon the strong foundation of UK-based companies who are already embedded within many global battery supply chains. The report has been produced by E4tech, commissioned by the Advanced Propulsion Centre and Innovate UK, supported by Knowledge Transfer Network, and WMG at the University of Warwick.

Based on the ambitions to stimulate the supply chain so the UK can attract a ‘giga-factory’, this report engaged with members of the supply chain who would support volume production capacity, finding them keen to seize the opportunity.

Read more: Hull to get one of UK's first new electric charging forecourts

Ian Constance, chief executive of Advanced Propulsion Centre, said: “With transport shifting towards electrification batteries are set to play a major part in our future propulsion mix. This report highlights the opportunities available to our automotive and chemical sectors to come together and collaborate to make the UK the go-to-place in Europe for battery cell manufacturing. We need to ensure that we have a rich and diverse supply chain here in the UK to anchor and attract Automotive OEMs supporting them to grow and flourish from the production of next generation low carbon vehicles.”

Currently three fifths of a vehicle battery pack’s value is the chemicals and materials. With the UK boasting some of the largest suppliers of materials to produce cathodes, anodes and electrolytes, the UK is well-placed to capitalise on this.

Sue Dunkerton OBE, interim chief executive of the Knowledge Transfer Network, said: “Our role is to connect people to accelerate innovation, driving UK growth. We are excited to have been part of this important project – together with our partners – to use our knowledge and connections of the UK chemical sector to shine a light on UK capability in this area and help develop this critical supply chain opportunity.”

At the refinery, where 700 staff and up to 400 contractors produce 20 per cent of the UK’s fuel, it produces for anode manufacturers, who then sell to battery manufacturers. Most of the oil majors re-work the “relatively low value bottom of the barrel” crude, but P66 converts it into high value products, including speciality coke. One type is used primarily for electric arc steelmaking, with Phillips 66 a leading producer, and another is for aluminium smelting. 

It was made an exemplar in ‘The Road to Zero’ – the Westminster push, and participated in a government-led Electric Vehicle Summit last September.

Dave Greenwood, Professor Advanced Propulsion Systems, WMG, University of Warwick, said: “Automotive batteries will halve in cost, double in energy density and see tenfold increases in manufacturing volumes before the end of the next decade. To do this we need advanced materials supplied in bulk and at very high quality. High value opportunities exist in cathode powders, anode powders, electrolytes, collector foils and separators, and the supply chain to provide them is in its infancy.”

The knowledge collaboration has been welcomed.

Adam Chase, Director, E4tech, added: “It has been very positive to see two industries working towards a shared opportunity. There is a clear industrial logic for expanding UK battery production and the UK Chemicals sector is ready and willing to scale up to meet the challenge. A lot now hangs on receiving clear demand signals in the form of a major battery plant investment in the UK.”

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