The recent warning by the Institute for Public Policy Research that a year long disruption in Chinese supply chains could place ninety thousand British jobs at risk and erase production of more than half a million electric vehicles is not merely an economic forecast. It is an indictment of a decade of policy drift, legal complacency and strategic ambiguity at the heart of the United Kingdom’s energy transition.
Behind the headline figures lies a far deeper structural vulnerability. The United Kingdom has bound its climate ambitions, its industrial policy and a growing portion of its national security interests to global supply chains that it neither controls nor meaningfully regulates. Nowhere is this more apparent than in its dependence on China for battery minerals, solar components, power electronics and processing capacity.
This dependency is not accidental. It is the direct outcome of legal frameworks, procurement practices, trade policy choices and an unresolved tension between open market orthodoxy and strategic statecraft.
The United Kingdom’s energy transition is legally anchored in the Climate Change Act 2008, as amended in 2019 to impose a binding net zero target by 2050. This statute creates a duty on successive governments to adopt policies capable of achieving carbon budgets set by the Climate Change Committee. It does not, however, mandate domestic sourcing of clean energy technologies, nor does it require supply chain resilience as a condition of compliance.
In practice, this has allowed the government to meet decarbonisation milestones through imports, particularly from China, without confronting the strategic consequences of outsourcing the material foundations of its energy system.
Public procurement law compounds this exposure. Under the Procurement Act 2023, which will replace retained European Union procurement rules in late 2024, contracting authorities must pursue value for money, competition and non discrimination, while having regard to national security considerations. Yet the Act deliberately avoids imposing a hard obligation to favour domestic production or allied suppliers. Any attempt to impose blanket exclusions on Chinese manufacturers would risk legal challenge under both domestic administrative law and the United Kingdom’s obligations under the World Trade Organisation Government Procurement Agreement.
This legal restraint is significant. China is a signatory to the WTO Agreement on Subsidies and Countervailing Measures and a beneficiary of most favoured nation treatment under UK tariff schedules. While the United Kingdom may impose targeted trade remedies through the Trade Remedies Authority, such measures must meet strict evidentiary thresholds of dumping or subsidisation causing material injury. They are not designed to address systemic concentration risk.
The National Security and Investment Act 2021 offers the government power to scrutinise and block foreign investment in sensitive sectors, including energy and advanced materials. It does not, however, apply retrospectively to entrenched supply relationships, nor does it prevent British firms from sourcing components from Chinese producers. It regulates ownership and control, not dependency.
In short, the United Kingdom possesses legal tools to block hostile acquisitions, but almost none to prevent strategic over reliance.
The IPPR correctly notes that China controls between eighty and ninety percent of global refining capacity for many critical minerals, including lithium, cobalt, manganese and rare earth elements. This dominance is not confined to mining. It extends to chemical processing, cathode production, cell manufacturing and recycling.
The United Kingdom’s own Critical Minerals Strategy, published in 2022 and updated in 2023, acknowledges this concentration risk and identifies minerals such as lithium, graphite and rare earths as essential to national security. Yet the strategy remains largely aspirational. It contains no binding targets for domestic processing, no enforceable obligations on manufacturers to diversify suppliers and no clear funding pathway comparable to the United States Inflation Reduction Act or the European Union Critical Raw Materials Act.
The legal consequence is stark. British automotive manufacturers and energy developers remain commercially free to procure from the cheapest available source, even when that source represents a single geopolitical chokepoint.
This approach would be questionable in any strategic sector. In energy, it verges on reckless.
Electric vehicles, solar farms and the illusion of control
Electric vehicle production in the United Kingdom already rests on fragile foundations. The collapse of Britishvolt in 2023 demonstrated how thin domestic battery manufacturing capacity remains. Envision AESC in Sunderland and Tata in Somerset represent meaningful progress, but together they will not meet projected demand for the late 2020s, let alone replace imported cells and components.
Solar power is even more exposed. More than ninety percent of photovoltaic modules installed in the United Kingdom originate in China or from factories using Chinese wafers and polysilicon. While allegations of forced labour in Xinjiang have led to enhanced reporting obligations under the Modern Slavery Act 2015, enforcement remains weak and supply chains opaque.
Legally, the United Kingdom has prohibited the use of forced labour under the Proceeds of Crime Act 2002 and customs legislation. In practice, tracing the provenance of polysilicon through multiple layers of subcontracting is almost impossible without intrusive state level auditing, which China has repeatedly resisted.
The result is a system that is both ethically compromised and strategically brittle.
The IPPR calls for a policy of securonomics, a term increasingly used within the Treasury to describe the integration of security considerations into economic policy. Chancellor Rachel Reeves has publicly endorsed the concept in principle.
Yet securonomics confronts formidable legal and diplomatic constraints.
Any attempt to mandate domestic sourcing would collide with the United Kingdom’s commitments under the WTO, the UK EU Trade and Cooperation Agreement and numerous bilateral investment treaties that protect foreign investors against discriminatory treatment.
Moreover, China remains one of the United Kingdom’s largest trading partners. According to Office for National Statistics data, bilateral trade exceeded one hundred billion pounds in 2023. A sudden shift towards exclusionary industrial policy would almost certainly provoke retaliation, whether through formal dispute settlement proceedings at the WTO or through informal regulatory pressure on British firms operating in China.
The United Kingdom has already witnessed this dynamic in other sectors, from financial services to education, where access to the Chinese market is often contingent on political restraint.
The geopolitics of clean energy dependency
China’s trillion dollar trade surplus, confirmed by customs data in late 2025, reflects not only manufacturing scale but deliberate state strategy. Through instruments such as the Belt and Road Initiative, export credit facilities from policy banks and direct industrial subsidies, Beijing has embedded itself at the centre of global clean energy supply chains.
This is not an accident of comparative advantage. It is industrial policy executed with geopolitical intent.
The United Kingdom, by contrast, dismantled much of its industrial planning apparatus in the 1980s and never replaced it with an institution capable of coordinating long term strategic investment.
The consequence is asymmetry. China can absorb short term losses to protect market share. British firms, bound by shareholder obligations and thin margins, cannot.
A disruption lasting twelve months, whether triggered by sanctions, conflict in the Taiwan Strait, or internal Chinese export controls, would not merely delay climate targets. It would trigger breach of contract claims, force majeure litigation, insolvencies and mass redundancies.
Under English contract law, many supply agreements include force majeure clauses that may or may not cover geopolitical events. The resulting disputes would flood the Commercial Court, while workers would rely on the insolvency protections of the Employment Rights Act 1996 and the limited guarantees of the National Insurance Fund.
None of this constitutes resilience.
The government spokesperson points to industrial and critical minerals strategies. These documents are legally non binding policy statements. They create no enforceable duties and confer no rights.
By contrast, the United States has embedded domestic content requirements into federal tax credits for electric vehicles. The European Union has legislated binding benchmarks for domestic extraction, processing and recycling.
The United Kingdom has done neither.
Even the proposal for international stockpiles of solar components and batteries raises complex legal questions. Stockpiling would require state aid, now regulated under the Subsidy Control Act 2022, and could be challenged if it distorts competition or lacks a clear public interest justification.
Furthermore, long term storage of lithium cells presents safety and degradation issues that existing product safety regulations, including the General Product Safety Regulations 2005, were never designed to address.
The IPPR is correct to warn of job losses and production shocks. Yet the deeper failure lies in the legal and institutional architecture that made such warnings inevitable.
For over a decade, the United Kingdom has treated clean energy as a climate issue rather than a strategic infrastructure issue. It has regulated emissions but not dependencies. It has encouraged deployment but ignored provenance. It has spoken of sovereignty while entrenching reliance.
True energy security is not measured solely in megawatts or carbon budgets. It is measured in the ability to sustain production under adverse political conditions.
Until Parliament is willing to legislate for supply chain resilience, to accept the trade offs inherent in strategic autonomy, and to confront the legal implications of industrial policy in an open trading system, Britain’s clean energy transition will remain exposed to decisions taken in Beijing, not Westminster.
The IPPR report is therefore less a warning than a diagnosis. The patient is already ill. The question is whether the political and legal system is prepared to prescribe a cure that goes beyond rhetoric.
If it does not, the next supply chain shock will not merely threaten ninety thousand jobs. It will expose the uncomfortable truth that the United Kingdom outsourced not only its manufacturing, but a significant portion of its sovereignty in the process.