How to build a circular economy for rare-earth elements

There’s a key chemical connection between many of the technologies that will power the race to net zero carbon emissions. Solar cells use neodymium, dysprosium and terbium to convert sunlight into power efficiently. Light-emitting diodes depend on europium and dysprosium for their luminescence. Neodymium and samarium are ingredients in powerful magnets used in wind turbines and electric motors. All of these elements are part of the group of 17 ‘rare earths’ — the 15 lanthanides on the periodic table, from lanthanum to lutetium, plus scandium and yttrium.

Demand for rare-earth elements (REEs) is growing fast. Around 170 kilograms of REEs are required to generate one megawatt of wind-powered energy, for example1, which is enough to supply about 900 homes in the northeast of the United States. Global use of these elements is projected to rise 5-fold from about 60,000 tonnes in 2005 to 315,000 tonnes in 20301.

Yet their availability is limited. China, the United States and Russia control 56% of global REE reserves and 76% of their production. For more than a decade, geopolitics, the aftermath of the COVID-19 pandemic and now war have disrupted global supply chains and made prices volatile. In 2020 and 2021, some REE prices tripled or quintupled after almost a decade of relative stability.