DOE Releases 2011 Critical Materials Strategy as China Limits Exports of Rare Earth Elements

Several materials used in the manufacture of clean energy technologies such as wind turbines, electric vehicles, solar cells and energy-efficient lighting are at risk of supply disruptions in the short term, according to a new report released by the US Department of Energy (DOE).

The 2011 Critical Materials Strategy is DOE's second report on this topic and provides an update to last year's analysis. After its analysis, the DOE has concluded that:

Supply challenges for five rare earth elements (REEs) (dysprosium, neodymium, terbium, europium and yttrium) may affect clean energy technology deployment in the years ahead.

The risks of supply disruptions in the short term will generally decrease in the medium and long term.

The report also includes a discussion of DOE's strategy to address these critical materials challenges. DOES says its strategy rests on three pillars:

Diversified global supply chains. As it stands now, the US is completely (100 percent) dependent on foreign sources for REEs, 97 percent of which are provided by China.

Development of substitute materials and technology.

Recycling, reuse and more efficient use of rare earths.

"The transition to a clean energy economy will create jobs, enhance our security and cut pollution," said U.S. Secretary of Energy Steven Chu. "This report provides information to help with the transition to a clean energy future, identifying strategies for responding to potential shortages of critical materials in the years ahead. It will help us seize opportunities, using American innovation to find substitutes, promote recycling and help secure supplies of rare earth elements and other materials used in energy technologies."

A summary of the DOE report is available here.

Supply chain disruptions for rare earths became even more likely last week when the Chinese Ministry of Commerce failed to include one of the world's largest rare earth producers on its list of 11 approved exporters for 2012. As WealthDaily reports, China also imposed a rare earth export quota of 30,184 tons this year, down marginally from 30,258 in 2010.a

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