Britain’s hopes of becoming an electric car production hub have received a boost after safety officials used Brexit freedoms to cut red tape around battery production.
In a note to industry, the Health and Safety Executive (HSE) said it currently had no plans to classify various lithium compounds as “toxic” – deviating from the position of the European Union.
Lithium is a vital material used in batteries, with companies and governments currently rushing to secure supplies around the world as they ramp up the switch to electric cars and other green technologies.
The HSE said there were no existing requirements for hazard labelling on lithium carbonate, lithium chloride and lithium hydroxide, and said: “No mandatory classification and labelling is proposed at this time.”
However, the regulator added that the issue “requires further assessment”. A final decision will fall to ministers, a source told the Financial Times.
The HSE’s decision differs from one taken last summer by the European Chemicals Agency, which opted to classify lithium as a “Category 1A reproductive toxin”, meaning it can harm human fertility and unborn children.
The EU’s stance has been heavily criticised by businesses and industry groups as lacking enough scientific basis, with bosses warning it would make the Continent less competitive as a result.
It comes as Western countries are seeking to break their dependency on China, where almost all of the world’s supplies of lithium are currently refined. There are no commercial lithium refineries in Europe today.
In a letter sent to EU policymakers last year, a group of companies and the International Lithium Association said: “An unjustified lithium salts classification will be a red flag that brings great uncertainty to companies looking to make long-term investments into European refining and recycling capacity, risking delays or different investment decisions towards competing markets.”
By contrast, UK businesses on Friday welcomed the HSE’s decision, which they said provided certainty and would potentially make British lithium refiners more competitive versus their European rivals.
Paul Atherley, chairman Tees Valley Lithium, which is setting up a factory that will produce battery-grade lithium in Teesside Freeport, said the decision to deviate from EU rules was good news for his company and “an opportunity for the UK”.
He explained: “A toxic classification would lead to additional costs in processing, packaging, and storing the material in the EU, making UK refined lithium hydroxide and carbonate more cost competitive, which will be a boost for the UK’s electric vehicle supply chain efforts.”
Roland Chavasse, secretary general of the International Lithium Association, also told the Financial Times that the HSE’s decision “can only help” in attracting investment in mining and refining lithium to the UK.
The Government has set out plans to create “a thriving battery ecosystem” domestically but has so far enjoyed mixed success.
Only two battery factories, Envision’s plant in Sunderland and Jaguar Land Rover owner Tata’s plant in Somerset, have been announced so far, compared to around 10 that would be needed to meet UK demands by 2040.
The HSE’s decision came as the Government separately threatened to pull out of an international treaty blamed for delaying the transition to green energy by critics.
Ministers said they would quit the Energy Charter Treaty unless reforms could be agreed, after a string of other countries including France, Germany and Spain vowed to leave.
The charter, which allows companies to sue governments over policies that could hurt their future profits, was set up after the Cold War to protect western investments in former Soviet states.
However, critics say it has allowed businesses to extract taxpayer cash from states that pursue legitimate policies such as the phase out of coal power, among other things.
Graham Stuart, an energy minister, said: “In its current form, the Energy Charter Treaty will not support those countries looking to make the transition to cleaner, cheaper energy sources such as renewables – and could even penalise our country for being at the forefront of those efforts.”
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