Work

Interplay of Chinese rare earth elements supply and European clean energy transition: A geopolitical context analysis

Year: 2024

Type: article

Abstract: The European clean energy sector sources approximately 98 % of its rare earth materials from China. We examine Chinese rare earth supply's effect on European renewable energy, particularly solar and wind sectors from 1990 to 2020. Using the gravity model, we find a positive correlation between China's rare earth supply and European solar energy during bullish markets. A similar response is seen in wind energy during bearish markets, considering global and China-specific geopolitical risks. We also observe a negative correlation between China's economic growth and mineral supply to Europe, with European income growth having no significant impact. Additionally, multiplicative economic growth negatively impacts Chinese mineral supply. The study also reveals a positive link between oil prices, rare earth export prices, geopolitical risks, and China's mineral exports. Distance negatively affects supply dynamics in the wind model but not in the solar model. However, the originality of this study lies in its examination of China's role as a rare earth supplier for Europe's clean energy transition, integrated into a gravity model. Significantly, this research provides potential trade insights and formulates an economic policy implication framework to guarantee a steady supply of China's rare earths for Europe's green deal objectives, while addressing the associated geopolitical risks.

Source: Renewable Energy

DOI: 10.1016/j.renene.2024.121986

Authors: Oleg Mariev, Dmitri Blueschke

Institutions: Ural Federal University, University of Klagenfurt

Language: English

Topic: Global Energy Security and Policy

Subfield: General Energy

Field: Energy

Domain: Physical Sciences

SDGs: Affordable and clean energy, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $4,160