A carbon trading platform, also known as a carbon market or emissions trading platform, is a financial marketplace where organizations and entities can buy and sell carbon credits or emissions allowances. The primary goal of carbon trading platforms is to reduce greenhouse gas emissions and combat climate change by creating economic incentives for entities to reduce their carbon emissions.

Here's how a carbon trading platform typically works:

• Emissions Allowances: Governments or regulatory bodies set an overall cap on the total amount of greenhouse gas emissions that are allowed within a specific jurisdiction or sector. This cap is typically established to limit emissions and reduce environmental impact.
• Allocation of Allowances: Under the cap-and-trade system, emissions allowances are distributed or allocated to participating entities, often based on historical emissions or other criteria. These allowances represent the right to emit a specific amount of greenhouse gases.
• Buying and Selling: Entities that emit fewer greenhouse gases than their allocated allowances can sell their excess allowances to those who exceed their allocated limits. This creates a market for emissions allowances.
• Carbon Credits: In addition to emissions allowances, carbon trading platforms may also involve the trading of carbon credits. Carbon credits are typically generated by activities that result in emissions reductions or removals, such as reforestation, renewable energy projects, or energy efficiency initiatives. These credits can be sold to entities looking to offset their emissions.
• Price Determination: The price of emissions allowances or carbon credits is determined by supply and demand in the carbon market. As emissions reduction targets become stricter or as entities seek to voluntarily reduce their carbon footprint, the price of carbon credits can fluctuate.
• Compliance and Offset: Some carbon trading platforms are mandatory and designed to help entities comply with government emissions reduction targets or regulations. Others are voluntary and allow organizations to offset their emissions voluntarily.
• Transparency and Verification: To ensure the integrity of the carbon market, transactions are often subject to rigorous monitoring, reporting, and verification processes. Independent third parties may verify emissions reductions and the validity of carbon credits.
• Environmental Benefits: Carbon trading platforms aim to incentivize emissions reductions, promote the transition to cleaner technologies, and fund projects that have positive environmental impacts.

One of the most well-known carbon trading platforms is the European Union Emissions Trading System (EU ETS), which operates in the European Union and covers various industries, including energy production, manufacturing, and aviation. Other countries and regions have also established their own carbon trading systems to address emissions reduction goals.

Overall, carbon trading platforms play a crucial role in the global effort to combat climate change by putting a price on carbon emissions and encouraging businesses and governments to reduce their environmental impact.

3. What are Carbon Credits?

Carbon credits, also known as carbon offsets or emission reduction credits, are a key component of carbon trading and cap-and-trade systems aimed at mitigating climate change. They represent a measurable reduction in greenhouse gas emissions or the removal of carbon dioxide (CO2) equivalent from the atmosphere. Carbon credits are typically measured in metric tons of CO2 or its equivalent in other greenhouse gases, such as methane (CH4) or nitrous oxide (N2O).

Here's how carbon credits work:

• Emission Reduction or Removal: Carbon credits are generated through activities or projects that either reduce greenhouse gas emissions (e.g., by using cleaner energy sources or improving energy efficiency) or remove carbon dioxide from the atmosphere (e.g., through reforestation or afforestation projects).
• Measurement and Verification: The reduction or removal of emissions must be accurately measured and verified according to established standards and methodologies. Independent third-party organizations often perform this verification to ensure the credibility of the carbon credits.
• Issuance: Once the emissions reduction or removal has been verified, carbon credits are issued. Each carbon credit represents one metric ton of CO2 or its equivalent that has been prevented from entering the atmosphere or removed from it.
• Trading and Sale: Carbon credits can be bought and sold on carbon markets or through specialized trading platforms. Entities that have exceeded their emissions limits or wish to voluntarily offset their emissions can purchase these credits to compensate for their own emissions.
• Compliance and Voluntary Markets: Carbon credits serve different purposes in different markets. In compliance markets, entities purchase credits to comply with emissions reduction regulations or obligations set by governments or regulatory bodies. In voluntary markets, organizations and individuals purchase credits as a means of voluntarily offsetting their carbon footprint.
• Environmental Benefits: The purchase of carbon credits helps fund emissions reduction projects and activities that have positive environmental and climate benefits. These may include renewable energy projects, energy efficiency initiatives, afforestation, reforestation, methane capture from landfills, and more.
• Additionality: One key principle in carbon credit generation is "additionality," which means that the emissions reductions or removals achieved by a project must be above and beyond what would have occurred in the absence of the project. This ensures that credits represent real and additional climate action.
• Sustainability and Co-Benefits: Many carbon credit projects are designed not only to reduce emissions but also to provide social, economic, or environmental co-benefits to local communities, such as job creation, biodiversity conservation, or improved air and water quality.

It's important to note that the carbon credit market is subject to various standards and regulations to maintain transparency, integrity, and credibility. Independent organizations and registries play a role in verifying and tracking the issuance and retirement of carbon credits to prevent double counting and ensure that the emissions reductions are genuine.

Carbon credits are a tool for addressing climate change by incentivizing emissions reductions and supporting projects that contribute to a more sustainable and low-carbon future. They are used by governments, businesses, and individuals to take action against climate change and reduce their carbon footprint.

Carbon trading and carbon credits are closely related concepts within the broader framework of climate change mitigation strategies. They are instrumental in addressing the issue of greenhouse gas emissions and climate change. Here's a detailed explanation of both terms:

Carbon Trading:

• Definition: Carbon trading, also known as emissions trading or cap-and-trade, is a market-based approach to reduce greenhouse gas emissions. It allows entities, such as companies or countries, to buy and sell emissions allowances, effectively putting a price on carbon emissions.
• How It Works: Under a carbon trading system, a regulatory authority or government sets an overall cap on the total amount of greenhouse gas emissions allowed within a specific jurisdiction or sector. This cap is often progressively reduced over time to achieve emissions reduction targets.
• Emissions Allowances: Entities subject to the cap are allocated a certain number of emissions allowances, which represent the right to emit a specific amount of greenhouse gases. These allowances are often distributed based on historical emissions, with the goal of gradually reducing emissions over time.
• Trading of Allowances: Entities that emit less than their allocated allowances can sell their surplus allowances to entities that exceed their limits. This creates a market for emissions allowances, and the price of allowances is determined by supply and demand.
• Compliance and Penalties: Entities are required to surrender a number of allowances equal to their actual emissions at the end of a compliance period. Failure to do so results in penalties. Entities that reduce emissions below their allowances can profit by selling their excess allowances.
• Environmental Goals: Carbon trading aims to achieve emissions reduction goals cost-effectively by allowing entities to find the most efficient ways to reduce emissions, either by reducing emissions directly or by purchasing allowances from others.
• Types of Markets: Carbon trading can occur in both compliance markets, where entities are legally obligated to participate, and voluntary markets, where entities choose to offset their emissions voluntarily.

Carbon Credits:

• Definition: Carbon credits, also known as carbon offsets or emission reduction credits, represent a quantified reduction in greenhouse gas emissions or the removal of carbon dioxide (CO2) equivalent from the atmosphere.
• Generation: Carbon credits are generated through specific activities or projects that reduce emissions or remove carbon from the atmosphere. These activities can include renewable energy projects, energy efficiency initiatives, reforestation, methane capture from landfills, and more.
• Measurement and Verification: To ensure the credibility of carbon credits, the reduction or removal of emissions must be accurately measured and independently verified according to established standards and methodologies.
• Sale and Use: Carbon credits can be bought and sold on carbon markets. Entities that wish to offset their emissions can purchase these credits to compensate for their own emissions, effectively balancing their carbon footprint.
• Environmental Benefits: The purchase of carbon credits helps fund projects that have positive environmental and climate benefits. These projects contribute to emissions reduction, biodiversity conservation, sustainable development, and more

"Net Zero" and "Carbon Neutral" are related but distinct concepts in the context of addressing climate change and reducing greenhouse gas emissions. They both aim to achieve a balance between the amount of greenhouse gases emitted and the amount removed or offset, but they do so in slightly different ways. Here's the difference between the two terms:

 

Previous Year Questions 1.Which of the following adopted a law on data protection and privacy for its citizens known as ‘General Data Protection Regulation’ in April, 2016 and started implementation of it from 25th May, 2018? (UPSC CSE 2019) (a) Australia (b) Canada (c) The European Union (d) The United States of America Answer: (c) 2.‘Broad-based Trade and Investment Agreement (BTIA)’ is sometimes seen in the news in the context of negotiations held between India and (UPSC CSE 2017) (a) European Union (b) Gulf Cooperation Council (c) Organization for Economic Cooperation and Development (d) Shanghai Cooperation Organization Answer: (a)

 

Source: The Hindu

 

 

CRITICAL MINERALS

 

 

1. Context

 

Critical mineral companies are boosting lobbying efforts in Washington, hoping to share in the ambitious investments that U.S. President Donald Trump has pledged to firms deemed essential to national security, a Reuters review of public records and interviews with executives and officials showed.

 

2. What are Critical Minerals?

 

Critical minerals are raw materials that are essential for economic and national security, but whose supply may be at risk due to geological scarcity, geopolitical issues, trade policy, or other factors

Critical minerals are typically defined by governments or organizations based on their importance to the economy and the potential risks to their supply

• Rare Earth Elements (REEs): neodymium, dysprosium, terbium
• Lithium
• Cobalt
• Graphite
• Gallium
• Indium
• Tungsten
• Platinum Group Metals (PGMs)

3. Why are critical minerals important?

 

• Minerals such as copper, lithium, nickel, and cobalt, along with certain rare earth elements, are considered critical due to their essential role in the global transition to greener and cleaner energy sources.
• According to the International Energy Agency (IEA), the demand for lithium surged by 30% in 2023, with nickel, cobalt, graphite, and rare earth elements experiencing growth between 8% and 15%, collectively valued at $325 billion.
• The IEA's Global Critical Minerals Outlook 2024 report indicates that achieving the world's goal of limiting global warming to 1.5 degrees Celsius within a net-zero emissions framework will necessitate a significant increase in demand for these minerals.
• By 2040, copper demand is projected to rise by 50%, nickel, cobalt, and rare earth elements by 100%, graphite by 300%, and lithium by 800%, which is vital for battery production.
• Developing sustainable supply chains for these minerals is therefore crucial. In India, the absence of readily available reserves has led to complete import dependence for minerals such as lithium, cobalt, and nickel. 

4. What is being done to spur production?

 

• Although India possesses natural reserves of several critical minerals, they remain largely unexplored and untapped. For example, despite holding 11% of the world's ilmenite deposits, which is the primary source of titanium dioxide used in numerous applications, India still imports a billion dollars' worth of titanium dioxide annually, as noted by former Mines Secretary Vivek Bharadwaj.
• Additionally, the "lucky" discovery of lithium reserves in the Union Territory of Jammu and Kashmir (J&K) by the Geological Survey of India (GSI) while exploring for limestone has raised hopes for achieving some level of self-sufficiency in lithium. Announced in February as India's first lithium find, these reserves are estimated at 5.9 million tonnes, prompting the government to expedite their extraction.
• Recognizing the risks of relying on a limited number of countries for these minerals and their processing, the central government amended the Mines and Minerals (Development and Regulation) Act, 1957 in August 2023 to allow mining concessions for 24 critical and strategic minerals.

5. Way Forward

 

The list of what's considered "critical" can vary by country and change over time based on technological developments and geopolitical situations. The management of critical minerals is an ongoing challenge that requires balancing economic needs, environmental concerns, and geopolitical realities

 

 

For Prelims: Critical minerals, Ministry of Mines, carbon emissions,  cleaner energy,  lithium, cobalt, nickel, graphite, tin, copper, Selenium, Cadmium, Centre of Excellence on critical minerals, Australia's CSIRO, Geological Survey of India,    For Mains:  1. What are critical minerals? Discuss their significance for a country's economic development and national security. Explain how the identification of critical minerals helps in reducing import dependency and ensuring resource security. (250 Words)

 

 

Previous Year Questions   1. With reference to the mineral resources of India, consider the following pairs: (UPSC 2010) Mineral                         90%Natural sources in 1. Copper                       Jharkhand 2. Nickel                        Orissa 3. Tungsten                    Kerala Which of the pairs given above is/are correctly matched?   A. 1 and 2 only            B. 2 only             C. 1 and 3 only            D. 1, 2 and 3   Answer: B   2. Recently, there has been a concern over the short supply of a group of elements called 'rare earth metals.' Why? (UPSC 2012) 1. China, which is the largest producer of these elements, has imposed some restrictions on their export. 2. Other than China, Australia, Canada and Chile, these elements are not found in any country. 3. Rare earth metals are essential for the manufacture of various kinds of electronic items and there is a growing demand for these elements. Which of the statements given above is/are correct? A. 1 only              B. 2 and 3 only           C. 1 and 3 only          D.  1, 2 and 3   Answer: C   3. In India, what is the role of the Coal Controller's Organization (CCO)? (UPSC 2022) 1. CCO is the major source of Coal Statistics in Government of India. 2. It monitors progress of development of Captive Coal/Lignite blocks. 3. It hears any objection to the Government's notification relating to acquisition of coal-bearing areas. 4. It ensures that coal mining companies deliver the coal to end users in the prescribed time. Select the correct answer using the code given below: A. 1, 2 and 3            B. 3 and 4 only           C. 1 and 2 only          D. 1, 2 and 4   Answer: A   4. Which of the following statements best describes the term 'Social Cost of Carbon'? It is a measure, in monetary value, of the (UPSC 2020)  A. long-term damage done by a tonne of CO2 emission in a given year. B. requirement of fossil fuels for a country to provide goods and services to its citizens, based on the burning of those fuels. C. efforts put in by a climate refugee to adapt to live in a new place. D. contribution of an individual person to the carbon footprint on the planet Earth.   Answer: A   5. Direction: It consists of two statements, one labelled as ‘Statement (I)’ and the others as ‘Statement (II)’. You are to examine these two statements carefully and select the answer using the codes given below: (UPSC ESE 2018) Statement (I): Green energy refers to one which does not harm the ecosystem of planet earth. Statement (II): All renewable energy is green energy. A. Both Statement (I) and Statement (II) individually true and Statement (II) is the correct explanation of Statement (I) B. Both statement (I) and Statement (II) are individually true, but Statement (II) is not the correct explanation of Statement (I) C. Statement (I) is true, but Statement (II) is false D. Statement (I) is false, but Statement (II) is true   Answer: C   6. Which type of battery is used in the recently launched world's first fully electric cargo ship by change? (Delhi Police Constable 2017) A.  Lead Acid        B. Manganese        C. Lithium ion        D. Nickel metal hydride   Answer: C   7. White gold is an alloy of (UPSC CAPF 2022)  A. gold, nickel and palladium B. gold, cobalt and palladium C. gold, titanium and platinum D. gold, magnesium and palladium   Answer: A   8. Graphene is frequently in news recently. What is its importance? (UPSC 2012)  1. It is a two-dimensional material and has good electrical conductivity. 2. It is one of the thinnest but strongest materials tested so far. 3. It is entirely made of silicon and has high optical transparency. 4. It can be used as 'conducting electrodes' required for touch screens, LCDs and organic LEDs. Which of the statements given above are correct? A. 1 and 2 only          B. 3 and 4 only         C.  1, 2 and 4 only          D.  1, 2, 3 and 4   Answer: C   9. Graphite and diamonds are__________. (WBCS Prelims 2020)   A. isotopes           B.  isomers             C. isotones           D. allotropes   Answer: D   10. Consider the following statements: (UPSC 2020) 1. Coal ash contains arsenic, lead and mercury. 2. Coal-fired power plants release sulphur dioxide and oxides of nitrogen into the environment. 3. High ash content is observed in Indian coal. Which of the statements given above is/are correct? A. 1 only         B. 2 and 3 only        C.  3 only         D. 1, 2 and 3   Answer: D   11. Which of the following can be found as pollutants in the drinking water in some parts of India? (UPSC 2013) 1. Arsenic 2. Sorbitol 3. Fluoride 4. Formaldehyde 5. Uranium Select the correct answer using the codes given below. A. 1 and 3 only           B. 2, 4 and 5 only          C. 1, 3 and 5 only           D.  1, 2, 3, 4 and 5   Answer: C   12. In the context of solving pollution problems, what is/are the advantage/advantages of the bioremediation technique? (UPSC 2017) 1. It is a technique for cleaning up pollution by enhancing the same biodegradation process that occurs in nature. 2. Any contaminant with heavy metals such as cadmium and lead can be readily and completely treated by bioremediation using microorganisms. 3. Genetic engineering can be used to create microorganisms specifically designed for bioremediation. Select the correct answer using the code given below:  A. 1 only         B.  2 and 3 only          C.  1 and 3 only             D. 1, 2 and 3   Answer: C   13. Due to improper/indiscriminate disposal of old and used computers or their parts, which of the following are released into the environment as e-waste? (UPSC 2013)  1. Beryllium 2. Cadmium 3. Chromium 4. Heptachlor 5. Mercury 6. Lead 7. Plutonium Select the correct answer using the codes given below.  A. 1, 3, 4, 6 and 7 only           B. 1, 2, 3, 5 and 6 only          C. 2, 4, 5 and 7 only               D. 1, 2, 3, 4, 5, 6 and 7   Answer: B   14. When was the Geological Survey of India (GSI) of India founded? (UPRVUNL Staff Nurse 2021) A. 1851             B. 1951            C. 1871              D. 1931   Answer: A

 

 

Source: The Hindu

 

 

WORLD TRADE ORGANISATION (WTO)

 

1. Context

China has lodged a formal complaint against India with the World Trade Organization (WTO), challenging New Delhi’s subsidies for electric vehicles (EVs) and batteries. The Commerce Ministry will examine China’s detailed submissions.

2. What is WTO?

• The World Trade Organization is the only international organization that deals with the rules of trade between countries.
• The WTO officially commenced in 1995 under the Marrakesh Agreement signed by 124 nations, replacing the General Agreement on Tariffs and Trade (GATT).
• Currently, it has 164 members and 23 observer governments (like Iran, Iraq, Bhutan, Libya, etc).
• According to its rules, all decisions are taken through consensus and any member can exercise a veto.
• It aims to promote free trade, which is done through trade agreements that are discussed and signed by the member states.
• The WTO also provides a forum for countries to negotiate trade rules and settle economic disputes between them. 

3. What is WTO's Ministerial Conference?

• The Ministerial Conference is the WTO’s top decision-making body and usually meets every two years.
• All members of the WTO are involved in the Ministerial Conference and they can take decisions on all matters covered under any multilateral trade agreements.
• The WTO’s 12th Ministerial Conference was held in Geneva from 12-17 June.
• It was supposed to end on 15 June, but with intensifying negotiations, the conference was extended by two days. 

4. Key takeaways from the meeting

4.1 Curtailing harmful fishing subsidies

• The WTO passed a multilateral agreement that would curb ‘harmful’ subsidies on illegal, unreported, and unregulated fishing for the next four years, to better protect global fish stocks.
• Since 2001, member states have been negotiating the banning of subsidies that promote overfishing.
• The current agreement, which establishes new trading rules, is the second multilateral agreement in WTO history. 
• India and other developing countries were able to win some concessions in this agreement.

4.2 Global food security

• Members agreed to a binding decision to exempt food purchased by the UN's World Food Programme (WFP) for humanitarian purposes, from any export restrictions.
• In light of the global food shortages and rising prices caused by the war between Ukraine and Russia, the group's members issued a declaration on the importance of trade in global food security and that they would avoid bans on food exports.
• However, countries would be allowed to restrict food supplies to ensure domestic food security needs.
• India's key demand to allow it to export food from its public stockholdings to other countries will reportedly be discussed in the next Ministerial Conference in 2023.

4.3 E-Commerce transactions

• Members agreed to continue the long-standing moratorium on customs duties on e-commerce transmissions.
• It will be continued until the subsequent Ministerial Conference or until March 31, 2024, depending on whichever comes first.

4.4 Covid-19 vaccine production

• WTO members agreed to temporarily waive intellectual property patents on Covid19 vaccines without the consent of the patent holder for 5 years so that they can more easily manufacture them domestically.
• The current agreement is a watered-down version of the original proposal made by India and South Africa in 2020.
• They had wanted broader intellectual property waivers on vaccines, treatments, and tests.
• Rich pharmaceutical companies had strongly opposed this, arguing that IPs do not restrict access to Covid vaccines and that the removal of patent protections gives researchers that quickly produced life-saving vaccines, a negative message. 
• The waiver agreed upon by the WTO was criticized by advocacy groups for being narrow in scope, as it did not cover all medical tools like diagnostics and treatments.

5. Significance of the Recent Agreements

• The fisheries agreement is of immense significance as it is the first time that members agreed with environmental sustainability at its heart.
• It will also help in the protection of the livelihoods of the 260 million people who depend directly or indirectly on marine fisheries. It is only the second multilateral agreement on global trade rules struck in its 27-year history.
• Second, the exemption of WFP's food from tariffs is vital for promoting global food security, especially in light of the global food shortages and rising prices caused by the war between Ukraine and Russia.
• Third, the temporary waiver will contribute to ongoing efforts to concentrate and diversify vaccine manufacturing capacity so that a crisis in one region does not leave others cut off.

6. Issues surrounding WTO

6.1 The burden for Poor countries

• The WTO rules include many Non-trade subjects as well. The subjects like environment, labor standards, fossil fuel subsidies, plastic pollution, and transparency in government procurement have been brought into the fold of the WTO.
• This is expected to raise costs for the poor and developing countries and impact the competitiveness of their goods.
• For instance, a poor country exporting cotton shirts must first meet high environmental standards at home. This will only raise costs and cut exports from poor countries.

6.2 Trade wars

• The US administration imposed steep tariffs in January 2018 on China alleging IP violations.
• In December 2019 the US also blocked the appointment of new nominees to WTO’s appellate body. This has paralyzed the WTO as a judge and enforcer of global trade rules.

6.3 Lack of consensus

• The developed nations’ game plan is to put the old obligations on the back burner and push the WTO to form rules on new areas like e-commerce.
• It is an area where the US firms have a clear edge.
• Most WTO member countries want them to first deliver on the agreed issues like reduction in agriculture subsidies.

 

For Prelims: General Agreement on Tariffs and Trade (GATT), Marrakesh Agreement, World Trade Organisation (WTO), 12th Ministerial Conference of WTO, and UN's World Food Programme (WFP). For Mains: 1. What have been the recent issue related to dispute settlement at WTO? Have the policies at WTO worked against the interest of emerging economies like India?(250 Words)

 

Previous year Questions 1. In the context of which of the following do you sometimes find the terms 'amber box, blue box, and green box' in the news? (UPSC 2016) A. WTO affairs B. SAARC affairs C. UNFCCC affairs D. India-EU negotiations on FTA Answer: A   2. In the context of the affairs which of the following is the phrase "Special Safeguard Mechanisms" mentioned in the news frequently? (UPSC 2010) A. United Nations Environment Program B. World Trade Organization Agreement C. ASEAN-India Free Trade D. G-20 Summits Answer: B   3. Consider the following statements: (UPSC 2017) 1. India has ratified the Trade Facilitation Agreement (TFA) of the WTO. 2. TFA is a part of WTO's Bali Ministerial Package of 2013. 3. TFA came into force in January 2016 Which of the statements given above is/are correct? A. 1 and 2 only B. 1 and 3 only C. 2 and 3 only D. 1, 2 and 3 Answer: A

 

Source: The Indian Express

 

 

RARE EARTH ELEMENTS

 

 

1.Context

 

The China-US trade war has had an enduring sticking point: rare earth minerals. Last Thursday, China ramped up the clampdown on its rare earth exports, prompting US President Donald Trump to threaten economic retaliation by way of 100% tariffs.

 

2.About rare earth metals

 

Rare earth elements or rare earth metals are a set of 17 chemical elements in the periodic table  the 15 lanthanides, plus scandium and yttrium, which tend to occur in the same ore deposits as the lanthanides, and have similar chemical properties

 

The 17 rare earths are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y)

 

Despite their classification, most of these elements are not really “rare”. One of the rare earths, promethium, is radioactive

Source:Thermo Fisher Scientific

 

 

3.Applications of rare earths

• These elements are important in technologies of consumer electronics, computers and networks, communications, clean energy, advanced transportation, healthcare, environmental mitigation, and national defence, among others
• Scandium is used in televisions and fluorescent lamps, and yttrium is used in drugs to treat rheumatoid arthritis and cancer
•  Rare earth elements are used in space shuttle components, jet engine turbines, and drones
• Cerium, the most abundant rare earth element, is essential to NASA’s Space Shuttle Programme
• In recent years, rare earths have become even more important because there has been an increase in demand for green energy
• Elements like neodymium and dysprosium, which are used in wind turbine motors, are sought-after more than ever as wind mills across the world continue to grow
• Moreover, the push for switching from internal combustion cars to electric vehicles has also led to a rise in demand for rare earth magnets made from neodymium, boron, and iron and batteries

 

 4. China's export restrictions and impact on India

 

• China has imposed restrictions on the export of seven rare earth elements (REEs) — dysprosium, gadolinium, lutetium, samarium, scandium, terbium, and yttrium — which are part of the 17 REEs.
• The country dominates the global refining of heavy REEs, giving it substantial control over critical supply chains, ranging from consumer electronics to defense. Although these measures do not constitute a complete export ban, they may cause temporary supply disruptions, as exporters navigate the permit process.
• India may not face an immediate disruption due to these restrictions. Despite government efforts to enhance domestic manufacturing of semiconductors and defense systems, the more sophisticated phases of production largely take place abroad, particularly in China and Japan. Japan, in anticipation of such issues, has already built stockpiles to buffer against REE-related supply shocks.
• Recognizing the strategic importance of REEs, India is aware that it holds around 6% of global deposits. However, the country’s capacity for mining and refining is minimal, largely due to the environmental challenges associated with such operations.
• India does extract some light REEs through its state-run firm, Indian Rare Earths Ltd, including monazite from coastal sands in Kerala. Nonetheless, imports still play a role.
• According to a recent statement by the Ministry of Mines in the Lok Sabha, India imported approximately 2,270 tonnes of REEs in 2023–24. Consequently, the national approach involves a mix of increasing domestic output and maintaining import channels

 

5. Way Forward

 

To support the strategic use of essential resources such as rare earth elements, India has launched the National Critical Mineral Mission (NCMM). This initiative aims to strengthen the country’s supply chain for critical minerals by boosting domestic production and establishing alternative international supply partnerships. According to a presentation by the Ministry of Mines in January, global events like China’s export restrictions, the Russia–Ukraine conflict, and other geopolitical factors have exposed vulnerabilities in the global critical mineral supply, underscoring the urgency of diversifying sources.

As part of the NCMM, the Indian government plans to oversee or support around 1,200 mineral exploration projects. It also intends to offer exploration licenses to encourage private sector participation and conduct auctions for additional critical mineral blocks

 

 

For Prelims: Applications of rare earths, rare earth elements For Mains: 1.Europe’s largest known deposit of rare earth elements found in Sweden: Could the discovery change geopolitics?

 

Previous Year Questions   1.Recently, there has been a concern over the short supply of a group of elements called ‘rare earth metals’. Why? (2012) China, which is the largest producer of these elements, has imposed some restrictions on their export. Other than China, Australia, Canada and Chile, these elements are not found in any country. Rare earth metals are essential for the manufacture of various kinds of electronic items and there is a growing demand for these elements. Which of the statements given above is/are correct? (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3 Answer (c)

 

Source:indianexpress