Pathways for greening the supply of rare earth elements in China

Rare earths are essential to a wide array of different technologies, including clean technology. However, rare earths production has a large environmental footprint, warranting a greening of the industry. We quantify environmental impacts from rare earths production in China and project pathways towards sustainability of the industry to 2025 under different scenarios for development. We show that net environmental cost–benefits in 2015 were −US$14.8 billion (net cost). This cost would increase to −US$16 billion by 2025 under a reference scenario and fall to −US$6 billion by 2025 in the most environmentally friendly scenario. The single strategy that can reduce environmental impacts the most is to tackle illegal mining. Doing so would include increased regulatory enforcement and can yield significant eco-cost savings (US$5 billion). However, it may also tighten supply of rare earths and ignite market volatility, particularly in an uncertain global trade climate. A complementary strategy of relaxing restrictions on legal production can contribute to higher eco-cost savings while concurrently meeting global demand for rare earths. The net environmental costs of rare earths production in China, the largest producer, are estimated to be almost US$15 billion. Scenarios show that the largest reduction in environmental impact can be achieved by tackling illegal mining.