The demand for REE
This publication focuses on the growing demand for rare-earth elements (REE), and the recycling opportunities in the European Union (EU) to meet this demand.
Neodymium, praseodymium, dysprosium and terbium are the four main elements used in permanent magnets. They represent the major part of the demand for rare earths. The sectors most concerned by this growing demand are wind energy and electric vehicles. They represent 85% of the European demand for permanent magnets. Recycling rare-earth is a promising way to meet this demand while reducing the environmental impact and promoting the circular economy.
However, rare earth recycling in the EU faces some significant challenges. Notably, the lack of players along the value chain. Although recycling has been identified as a priority, there is still some way to go to establish a robust and sustainable recycling chain.
The wind sector is one of the most important sectors for rare earth demand. Projections of installed capacity and assumptions on the share of domestic production indicate that demand for wind power is expected to be between 50 and 176 million by 2035.
However, forecasts remain uncertain due to changes in the supply chain, technology mix and the emergence of alternative technologies. Although the demand outlook is more robust for the automotive sector, only a small share of electric motors are produced in Europe. Asia has a virtual monopoly on their manufacture. Local demand for rare earths will therefore be lower than its potential in the electric vehicle market.
The REE production chain
- Recycling of rare-earth elements in the EU is an important opportunity to meet the growing demand and reduce the environmental impact of their use.
- Scientific and technological advances in recycling have great potential to optimize the recycling process and make it more cost-effective over time.
- However, building strong players along the value chain for these elements is a real challenge.