UK-EU green supply chain coordination urged to counter China dominance

LONDON — Britain and the European Union should coordinate efforts to wrest green supply chains away from China, a think tank with close links to the ruling Labour Party has said.

A new report by the Institute for Public Policy Research (IPPR) suggests doubling down on cross-channel energy cooperation to help address “painfully high” energy prices and insulate against geopolitical instability.

The report suggests Prime Minister Andy Burnham’s administration completes the energy chapters of a planned “EU reset” begun by Keir Starmer, which would see the U.K. and EU link their emissions trading system and reintegrate Great Britain into Europe’s single energy market.

These moves would help support investment in the North Sea, address price instability and protect companies on both sides of the channel from incoming carbon border taxes.

But it also suggests going further — with a view to establishing regional independence on green energy.

Competing with China

The authors argue that the U.K. rejoining the North Sea Energy Cooperation Group (NSEC) as a full member would make it easier to coordinate energy investments like carbon capture storage, energy interconnectors and offshore wind farms — crucial to the green transition.

Since Brexit, the U.K. has only been a partial member of the deliberative body via a memorandum of understanding, but full membership would make “technocratic planning challenges around grid build-out” a lot easier to navigate, the authors say.

The report also argues for another extension of the grace period on electric vehicle battery rules of origin, which has been plaguing car manufacturers on both sides of the channel since Britains’s exit.

It also warns that in the long term, battery production and the rest of the EV supply chain need to be moved as far as possible to Europe from China.

To achieve this, it recommends a more coordinated approach to industrial policy and especially on the scope of net-zero investment from China.

“This type of partnership would not be straightforward,” authors Tazu Walden and Marley Morris write.

“Cooperation outside formal EU structures can become more difficult during geopolitical turbulence, where coordination needs to be rapid, predictable and ideally institutionalised.

“On top of this, the dynamic alignment that is necessary for deeper cooperation can be made more challenging during crises, as the U.K. and European states might have policy responses that vary in their approach and effects.”

The IPPR has deep links to Labour and shaped the policy agenda of both the last Labour government and Keir Starmer’s administration.