The UK's Health and Safety Executive (HSE) has announced that it will not classify various lithium compounds as toxic, deviating from the European Union's stance on the matter. This decision is expected to reduce red tape and provide certainty for battery production in the country. The HSE stated that there are currently no requirements for hazard labelling on lithium carbonate, lithium chloride, and lithium hydroxide. However, the issue will undergo further assessment, and a final decision will be made by ministers. The EU's classification of lithium as a reproductive toxin has been criticized by businesses and industry groups for lacking scientific basis and potentially making Europe less competitive.

The UK's decision comes as Western countries aim to reduce their dependence on China, which currently dominates the global supply of lithium. There are currently no commercial lithium refineries in Europe. UK businesses have welcomed the HSE's decision, as it is expected to make British lithium refiners more competitive compared to their European counterparts. The chairman of Tees Valley Lithium, which is setting up a factory in Teesside Freeport, stated that the decision would reduce costs and boost the UK's electric vehicle supply chain efforts. The secretary general of the International Lithium Association also believes that the decision will attract investment in mining and refining lithium in the UK.

The UK government has plans to create a thriving domestic battery ecosystem, but progress has been mixed so far, with only two battery factories announced. The HSE's decision to cut red tape around battery production is seen as a positive step towards achieving this goal. In a separate development, the UK government has threatened to withdraw from the Energy Charter Treaty, which allows companies to sue governments over policies that could harm their future profits. The government is seeking reforms to support the transition to cleaner energy sources and avoid penalization for its efforts.

Overall, the HSE's decision to not classify lithium compounds as toxic is expected to benefit the UK's electric car production industry by reducing costs and increasing competitiveness. It aligns with the government's plans to create a thriving battery ecosystem domestically. However, the issue will undergo further assessment, and a final decision will be made by ministers.