Rare-Earth Resources Increase Chinese Clout

Over the past 5 years, China has emerged as a world-leading producer of solar and wind technologies. Due to its insatiable appetite for energy, the country is quickly becoming a top installer of renewables as well.

China is still consuming coal and oil at astonishing rates, however. On average, the country installs a new coal-fired facility every two weeks. Some experts believe that this will set China back and negate the progress it has made in the development of renewables.

Even so, China will continue to be a leader in the export of wind and solar technologies.

There’s another factor that could increase China’s role as a central figure in the renewables space: Its control of 95% of the rare earth resources like Indium, Gallium and Lithium. These are central to the functionality of solar cells (CIGS and CdTe) and battery technologies for automotive and power storage applications.

This is not a surprise. But the announcement from Chinese officials last month that it would decrease shipment of these resources by 72% certainly was. The goal is for China to lure technology companies over to the country by giving them access to restricted resources. If it works, we may see a lot more clean energy firms moving over to China.

It has given such signals in the past. China actually made a similar announcement in 2009, raising the ire of the international community.

Already, companies are setting up shop en masse in China due to lower labor costs and the need to be closer to the burgeoning renewables market around Asia. This decision to restrict exports of rare resources will likely accelerate the trend.

The Wall Street Journal had a great piece on the subject and the Energy Collective had a piece of commentary on the implications of the export restrictions on the renewable energy industry.

Also, below is a report from CNN on China’s important role in the rare elements market:

[bc_video account_id=”” player_id=”” video_id=””]

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I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep in touch through twitter! My profile name is: Stphn_Lacey

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