"Each day, researchers and entrepreneurs across the United States are working to develop and deploy clean energy technologies that will enhance our security, reduce carbon pollution and promote economic prosperity. This strategy is an important step in planning for growing global demand for clean energy products that will help strengthen the U.S. economy and create jobs," said Secretary of Energy Steven Chu. "Ensuring reliable access to critical materials will help the United States lead in the new clean energy economy."
The strategy analyzes fourteen elements, identifying five rare earth metals (dysprosium, neodymium, terbium, europium and yttrium) as well as indium as most critical based on importance to clean energy technologies and supply risk. It also explores eight policy and program areas that could help reduce vulnerabilities and address critical material needs, including research and development, information-gathering, permitting for domestic production, financial assistance for domestic production and processing, stockpiling, recycling, education and diplomacy.
Building on this strategy, DOE will work closely with its national labs, other federal agencies, Congress and international partners to develop its first integrated research agenda on critical materials and strengthen its information-gathering capacity to proactively address supply and demand for products that contain these critical metals. An updated report will be issued by the end of 2011.
This report examines the role of rare earth metals and other materials in the clean energy economy. It was prepared by the U.S. Department of Energy (DOE) based on data collected and research performed during 2010. Its main conclusions include:
• Several clean energy technologies—including wind turbines, electric vehicles, photovoltaic cells and fluorescent lighting—use materials at risk of supply disruptions in the short term. Those risks will generally decrease in the medium and long term.
• Clean energy technologies currently constitute about 20 percent of global consumption of critical materials. As clean energy technologies are deployed more widely in the decades ahead, their share of global consumption of critical materials will likely grow.
• Of the materials analyzed, five rare earth metals (dysprosium, neodymium, terbium, europium and yttrium), as well as indium, are assessed as most critical in the short term. For this purpose, “criticality” is a measure that combines importance to the clean energy economy and risk of supply disruption.
• Sound policies and strategic investments can reduce the risk of supply disruptions, especially in the medium and long term.
• Data with respect to many of the issues considered in this report are sparse.
In the report, DOE describes plans to (i) develop its first integrated research agenda addressing critical materials, building on three technical workshops convened by the Department during November and December 2010; (ii) strengthen its capacity for information-gathering on this topic; and (iii) work closely with international partners, including Japan and Europe, to reduce vulnerability to supply disruptions and address critical material needs. DOE will work with other stakeholders—including interagency colleagues, Congress and the public—to shape policy tools that strengthen the United States’ strategic capabilities. DOE also announces its plan to develop an updated critical materials strategy, based upon additional events and information, by the end of 2011.
DOE’s strategy with respect to critical materials rests on three pillars. First, diversified global supply chains are essential. To manage supply risk, multiple sources of materials are required. This means taking steps to facilitate extraction, processing and manufacturing here in the United States, as well as encouraging other nations to expedite alternative supplies. In all cases, extraction and processing should be done in an environmentally sound manner. Second, substitutes must be developed. Research leading to material and technology substitutes will improve flexibility and help meet the material needs of the clean energy economy. Third, recycling, reuse and more efficient use could significantly lower world demand for newly extracted materials. Research into recycling processes coupled with well-designed policies will help make recycling economically viable over time.
The scope of this report is limited. It does not address the material needs of the entire economy, the entire energy sector or even all clean energy technologies. Time and resource limitations precluded a comprehensive scope. Among the topics that merit additional research are the use of rare earth metals in catalytic converters and in petroleum refining.
DOE welcomes comments on this report and, in particular, supplemental information that will enable the Department to refine its critical materials strategy over time. Comments and additional information can be sent to firstname.lastname@example.org.
The structure of this report is as follows:
Chapter 1 provides a brief Introduction.
Chapter 2 reviews the supply chains of four components used in clean energy technologies:
• Permanent magnets (used in wind turbines and electric vehicles)
• Advanced batteries (used in electric vehicles)
• Thin-film semiconductors (used in photovoltaic power systems)
• Phosphors (used in high-efficiency lighting systems)
These components were selected for two reasons. First, the deployment of the clean energy technologies that use them is projected to increase, perhaps significantly, in the short, medium and long term. Second, each uses significant quantities of rare earth metals or other key materials.
Chapter 3 presents historical data on supply, demand and prices. Data is provided for 14 materials, including 9 rare earth elements (yttrium, lanthanum, cerium, praseodymium, neodymium, samarium, europium, terbium and dysprosium) as well as indium, gallium, tellurium, cobalt and lithium.
Chapters 4, 5 and 6 describe current programs related to critical materials within DOE, the rest of the federal government and other nations.
Chapter 7 presents supply and demand projections. Potential supply/demand mismatches are identified and shown graphically. Complexities that complicate market response to these mismatches are also discussed.
Chapter 8 presents “criticality assessments”— analyses that combine the importance of a material to the clean energy economy and supply risk with respect to that material. The analytical approach is adapted from a methodology developed by the National Academy of Sciences (NAS 2008). The analyses may be useful in priority-setting for research and other purposes. Applying this methodology to the materials listed above, terbium, neodymium, dysprosium, yttrium, europium and indium have greatest short-term “criticality”.
Chapter 9 discusses program and policy directions. Eight broad categories are considered: (i) research and development, (ii) information gathering, (iii) permitting for domestic production, (iv) financial assistance for domestic production and processing, (v) stockpiling, (vi) recycling, (vii) education and (viii) diplomacy. These programs and policies address risks, constraints and opportunities across the supply chain, as shown in Figure ES-3. DOE’s authorities and historic capabilities with respect to these categories vary widely. Some (such as research and development) relate to core competencies of DOE. Others (such as permitting for domestic production) concern topics on which DOE has no jurisdiction. With respect to research and development, topics identified for priority attention include rare earth substitutes in magnets, batteries, photovoltaics and lighting; environmentally sound mining and materials processing; and recycling. The chapter ends with a summary of recommendations.