Clean energy depends on Chinese materials. Is expanding it pro-China?

A Democratic-led plan to cut carbon emissions and expand cleaner energy sources would play into the hands of China, some Republicans argue.

At a hearing on the CLEAN Future Act, the Democrats’ climate bill, Rep. Cathy Rodgers, R-Wash., contended the plan could make the United States vulnerable.

Rodgers, the ranking member of the House Energy and Commerce committee, said: "90% of the solar panels, 80% of the wind machines, 90% of the rare earth minerals (for) the batteries are in Asia or in China. So a clean energy future that is based upon those kinds of solutions that are dominated by China is really a pro-China agenda."

While Rodgers singled out China, she also included all of Asia, which would include longtime allies such as Japan and South Korea. With an eye on the geopolitical angle she emphasized at the end, we looked at what the numbers say about American reliance on China for renewable energy materials.

China’s current dominance in key materials is real. Whether that means a clean-energy policy amounts to a pro-China agenda is another question.

We’ll go through the three renewable power systems Rodgers listed and weigh whether the data support her broader concern.

Rodgers is right that most solar panels come from Asia. The solar supply base extends beyond China, but it does have a critical reliance on Chinese materials and companies.

Rodgers’ staff pointed to a report from the Center for Strategic and International Studies, a Washington-based think tank, that said "the United States is most exposed in the solar sector, followed by energy storage and then wind."

The study detailed China’s key role in producing the parts that go into solar panels.

A silicon wafer is the building block of a solar panel. It’s the piece that turns sunshine into electricity, and "more than 90% of the world’s capacity is in China," the February report said.

The wafers are used to make solar cells and clusters of cells are assembled into solar panels, sometimes called photovoltaic modules. And here’s where the solar supply chain takes a geographic hop.

In 2019, the latest year for which the U.S. Energy Information Administration has data, China — even grouped with Singapore by the EIA —  accounted for less than 6% of the solar panels imported to the U.S., as measured by their generation capacity. Malaysia was the single largest supplier, representing about 38% of all shipments. Vietnam came in second with 25%.

Does that mean the U.S. relies more on Malaysia than China? Not really. Many of the Malaysian-based solar factories are Chinese-owned. And wafers, which primarily come from China, remain a key component. (Solar companies based in Japan, the U.S., South Korea and Singapore also own plants in Malaysia.)

David Sandalow, a veteran of the Clinton and Obama administrations now at Columbia University’s Center on Global Energy Policy, says such concentration in the supply chain is not a good thing, and it will be important to see production spread more evenly around the globe.

But he noted that the dependence is mutual: Chinese companies need American buyers.

"If Chinese manufacturers stopped selling to the U.S., other manufacturers would enter the market," Sandalow said. 

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The authors of the CSIS report caution, though, that "wafer factories are expensive and technically challenging to build."

Rodgers’ claim that 80% of the wind machines are from China or Asia is not right.

Three large components go into wind turbines — towers, blades and generators, the units that actually convert the motion of the spinning blades into electricity. The import patterns look a little different for each.

The U.S. Energy Department’s latest report shows China providing a fifth of all the imported blades. But for towers, China doesn’t rank in the top five among countries selling to the U.S. And for wind-powered generating systems, China accounts for about 5% of imports.

In dollar terms, China represents only 16% of imports to the U.S. for all wind power parts, nowhere near the 80% Rodgers claimed.

However, wind turbines rely on powerful magnets, and those magnets need compounds that tend to come from China. 

Rodgers specifically highlighted rare earth minerals and their tie to renewables. The connection is strongest for wind power and electric vehicles. The magnets in wind turbines and electric car motors require neodymium and dysprosium, two of the 17 rare earth minerals.

She also mentioned batteries, which are essential to storing power from wind and solar, and for running electric cars and trucks. Batteries rely on cobalt and lithium, which are not on the list of rare earth elements. The Democratic Republic of the Congo dominates the cobalt supply. Australia and Chile produce most of the world’s lithium.

China dominates the production of rare earth minerals on a commercial scale. Between 2016 and 2019, China supplied 80% of the U.S. demand for these materials. China also accounts for about 80% of global production.

The main caveat is that supply chains aren’t locked in for all time. While these minerals are called "rare earth," they are not rare. Neodymium, for example, is about as common as zinc or lead. The problem is they generally aren’t concentrated enough to make commercial extraction worthwhile. 

In testimony March 22 before the House Energy and Commerce Committee, former Obama administration Energy Secretary Ernest Moniz said "there’s no doubt, as a sane energy security issue, we need to work to diversify these sources of minerals and their processing." 

That effort is underway. In 2019, the Trump administration triggered the Defense Production Act, and the Pentagon signed contracts with domestic suppliers. The U.S. government now has a stockpile of 600 tons of neodymium. Building more robust supply chains even rated an executive order from President Joe Biden.

With an eye toward finding chemical substitutes, the government’s Advanced Research Projects Agency is backing research to make magnets that are rare-earth-free. 

However this pans out, part of current clean-energy policy focuses on weaning the U.S. off its dependence on China.

Rodgers said that the Democratic clean energy plan is pro-China, because "90% of the solar panels, 80% of the wind machines, 90% of the rare earth minerals … are in Asia or in China."

China produces over 90% of silicon wafers, a key building block in solar panels. China produces 80% of the rare earth minerals used in the U.S. for magnets used in electrical vehicles and wind turbines, though its role in wind power overall is far less dominant.

But Rodgers' conclusion that the Democrats’ legislation amounts to a pro-China agenda omits key context about the overall direction of U.S. government policy. For some time and continuing today, the U.S. has been working to diversify its supply base and shrink its reliance on Chinese materials.

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