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Green technology

Rare Earth Elements: A Critical Component of America's Energy and Economic Future

Strategic Insights

— 1 min read

The United States relies heavily on China for access to rare earth elements (REEs), which play a crucial role in the production of clean energy systems, including solar inverters, battery energy storage systems, and grid technologies. As trade negotiations between the two nations continue, it is clear that the U.S. must build out its own REE mining and processing capabilities to ensure long-term energy security and reduce dependence on imported materials.

Key Takeaways:

  • Rare earth elements are a group of 17 metallic elements with unique properties that are essential in various industries, including energy, aerospace, and electronics.
  • The U.S. depends on imports to satisfy 80% of domestic demand for REEs, with 70% coming directly from China.
  • REEs are used in critical components of clean energy systems, such as solar inverters, battery energy storage systems, and grid technologies.
  • Despite limited applications, REEs play an important role in advancing grid modernization and next-generation technologies.
  • The U.S. has committed to onshoring key parts of the rare earth supply chain through investments in domestic REE production and processing facilities.
  • Securing access to REEs through trade agreements is essential to continue manufacturing clean energy technologies, support national security, and drive economic growth.

Statistics:

  • The U.S. depends on imports to satisfy 80% of domestic demand for REEs (Source: Solar Energy Industries Association, 2024).
  • 70% of U.S. REE imports come directly from China (Source: Solar Energy Industries Association, 2024).
  • REEs are used in tiny amounts (on the gram-to-milligram scale) in solar inverters and battery energy storage systems (Source: Solar Energy Industries Association, 2024).
  • The U.S. has only one commercial-scale REE mine, the Mountain Pass Mine owned by MP Materials in California (Source: Solar Energy Industries Association, 2024).
  • The U.S. Department of Defense has taken an equity stake in MP Materials and signed a 10-year magnet offtake agreement and 10-year price floor for neodymium-praseodymium oxide (Source: Solar Energy Industries Association, 2024).

Sources:

  • Solar Energy Industries Association. (2024). Rare Earth Elements: A Critical Component of America's Energy and Economic Future.
  • None.

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