Rare Earth Metals in the Cleantech Industry

China’s monopoly over the global rare earth metals market has come under increased international scrutiny following recent efforts on the part of the Chinese government aimed at consolidating its domestic rare earth metal industry. Accounting for 97% of worldwide rare earth metal production, China’s new export quotas, introduced in July 2010, have seen prices for rare earths skyrocket.

As a result, rare earth metals have been identified as a troubling area of potential risk for a number of prominent clean energy technologies including wind energy, electric cars, fuel cells, and energy efficient lighting.

Although positive initiatives offer the potential for market alleviation in the long term, the short term picture for the clean technology will be characterized by a significant supply risk brought about by China’s strict new export quotas. This will almost certainly come to influence the adoption and commercialization of certain technologies across the cleantech industry.

It is therefore becoming increasingly important for respective clean technology manufacturers to assess their rare earth needs and explore options for reducing dependence. Up to this point, however, there has been very little evidence of this kind of assessment despite the increased market prices for critical rare earth metals.