Rare earth metals: challenge for a low carbon future

If you have been following the climate change debate, then you will have encountered discussions about the role of rare earth metals in clean energy technologies. Rare earth metals are essential to the manufacture of clean energy and transport technology, but we currently don't produce enough of them to meet our climate targets, and they could limit our ambitious plans to achieve them.

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Rare earth metals, such as yttrium, lanthanum, and cerium, are integral to the manufacturer of a wide range of technologies that are central to the transition to a low-carbon economy. They are used in the manufacture of a wide range of technologies, including batteries, smartphones, and military equipment. Crucially, their strong magnetic properties, high electrical conductivity, lightness and efficiency make them critical to the clean energy industry. Key elements of that industry – including wind turbines, electric car batteries, energy-efficient light bulbs, and efficiency motors/generators – all require magnets that are generated using dysprosium, neodymium, and their periodic neighbours. So far, no substitute has been found to match rare earth metals’ weight and efficiency.

Until recently, there has been an adequate supply to meet global demand, and the metals’ scarcity has not been too great an obstacle. Now, questions are being asked about the future of the supply. Securing supply is particularly challenging, because rare earth metals are not commonly found in sufficient concentrations to be mined profitably.

China currently holds a near monopoly on supply. China mines 94-97% of the rare earth metals globally and, while efforts have increased in America and Europe to find alternative supplies, there are still no clear avenues to diversifying supply. China’s effective monopoly is an increasing worry: when, in 2010, they halted the export of rare earth exports to Japan, it led to a 30-fold increase in the price by the summer of 2011. And the market is volatile: the price subsequently plummeted to less than half that price. As of late 2015, Harmer & Nex, reported that there were 53 rare earth development projects outside of China. Developing these sources could reduce China’s global monopoly to approximately 70% of the market and potentially provide enough rare earth metals to meet global demand, although it is unclear if they include the demand from clean technologies in this assessment.

As we transition to low-carbon energy and transportation systems, demand for rare earth metals will increase drastically, and it is not clear that supply can match it. An innovative study recently published in Environmental Science & Technology demonstrates that climate policies will boost an already increasing demand of neodymium by at least 60% by 2050. They find that although neodymium is used in many clean technologies, including wind turbines, most of the demand will come from growth in clean cars. Depending on the metal content required for clean technologies, it is likely that the demand for rare earth metals will exceed supply.

MIT’s Randolph Kirchain, Elisa Alonso, and Frank Field also previously explained in Environmental Science and Technology that there would need to be an increase of neodymium and dysprosium of over 700% and 2600% respectively in the next two decades in order for clean technologies to contribute significantly to a reduction in greenhouse gases. The supply of these metals was increasing at 6% a year in 2012, and is under threat. In order to meet demand for clean technologies, supply would need to increase 8% and 14% yearly.

At COP24, as countries negotiate options to increase climate change mitigation ambitions, rare earth metals may emerge as a binding constraint. India for example, has committed to the ambitious target of having 30% of all new vehicles coming onto its road electric by 2030. As noted above, this could require very large quantities of rare earth metals, potentially far exceeding current and projected supply. Meeting global emissions reduction targets will be near impossible if the supply of rare earth metals is not diversified, increased, or made more efficient. What’s more, the costs and environmental impacts of rare earth metal extraction can be high, particularly as REMs being prospected are found in more complex and less concentrated ore forms. The extraction process is complex and highly polluting. Efforts to transition to a green economy would benefit from a more comprehensive understanding of the limitations and diversification options of these natural resources.

The global community needs to start thinking about how the lack of rare earth metals might affect global emissions reductions commitments and the likelihood that without new technological advancements we could fall short of meeting our 1.5°C target. If we do not find more efficient ways to use or replace rare earth metals, diversify our sources, and ultimately reduce reliance, the lack of rare earth metals will be a major constraint in achieving our global climate targets.

This blog is an updated version on one previously written by the same author for the Columbia University Climate Centre.