When thinking about cleantech, I tend to think in terms of resources and supply constraints, meaning that when we switch from a fossil fuel like coal to a renewable resource like wind, I consider what natural resources we’re now dependent on. So Damien Ma’s piece this week in Foreign Affairs caught my attention. Ma profiles China’s attempts to lock up and put government controlled pricing on the rare earths market because it currently controls about 90 percent of the rare earth supply (elements like lanthanum and cerium). China doesn’t want to limit pricing, it wants to drive it up because it knows, for example, you can’t build an iPhone battery without many rare earth elements. These moves matter to the renewable energy market because products like electric vehicle batteries and wind turbines, which require rare earths to produce components like permanent magnets, are highly resource dependent. And primarily dependent on Chinese sources. Ma points out that China could start to hoard rare earths for its own renewable energy needs as it addresses its own skyrocketing energy needs. It’s true that China’s behavior may invite competitors, but its worth remembering that switching to any energy source involves new resource dependencies.
Green IT readers, I’m away next week, but will be back the following week with lots of new analysis!