The global transition to green energy is often framed as a simple shift from “dirty” to “clean”. However, beneath the sweeping blades of a wind turbine or the gleaming exterior of an electric vehicle (EV) lies the gritty reality of our unsustainable extraction of rare earth elements.
To meet net-zero targets, we are entering an era of unprecedented mineral extraction. Demand for rare earth elements (REEs) is projected to spike in the coming years. But there are alternatives to this destructive practice in development that could reshape the industry entirely.
The cost of the status quo
What’s clear is that, currently, our reliance on REEs is not sustainable. A wind plant, for example, requires nine times more REEs than a gas-fired plant. Heavy rare earths are essential for protecting the turbine’s vast one-tonne magnets against heat, making them indispensable for high-performance green technology. Electric cars, which governments around the globe are incentivising, require six times the rare earth mineral inputs of a conventional car. With current estimates, demand for REEs could increase sixfold by 2040.
Traditional mining for these 17 elements is notoriously destructive; for every one tonne of REEs produced, the process typically generates approximately 2,000 tons of toxic waste. This includes acidic wastewater and radioactive residues like thorium and uranium. And beyond the ecological footprint, the supply chain is fraught with geopolitical sensitivity.
Matthias Buchert, a senior researcher from Öko-Institut who has been “concerned with rare earth recycling for 15 years,” recently spoke to RESET about the topic. He referred to the major diplomatic and economic standoff in September 2010 as a turning point. After “tensions between Japan and China, China blocked the export of rare earths to Japan,” an event that “caused the prices of REEs to rise 10-15 fold.” After that, recycling REEs from existing materials became a global priority.
Recycling REEs from electronic products is still “almost impossible”
Despite this global priority, recycling REEs from specifically our small, daily electronic products is still practically out of reach, according to Buchert. For example, REEs comprise the magnets hidden inside your smartphone, where they control everything from the crisp sound in your speakers and the precise vibration of your notifications to the autofocus in your camera. They are essential to the 5.3 billion mobile devices currently in use worldwide. However, since most people replace their phones every two years, millions of tons of electronics are discarded annually.
These discarded devices are now considered “urban mines” because they contain high concentrations of valuable metals. But these are present in such minuscule amounts that recycling “electronics in particular is much more difficult, I would say almost impossible, because REEs are tiny and embedded in dozens of other elements”, explains Buchert.
Recycling these minuscule parts is extremely “tricky because [for example] you have to separate the magnets from the motors, [and there are] differing processes for treating the magnets, such as short loops and long loops.” This complexity is the primary reason why, today, less than one percent of REEs are recycled.
However, traditional extraction isn’t a walk in the park, either. You might only receive around 0.5 – 1.5 percent REEs from raw ore. But, while small electronic gadgets such as phones and laptops are “almost impossible” to recycle, larger components such as electric vehicle batteries and wind turbines are showing increasing promise. Recycling these larger components offers a distinct advantage over traditional mining; because the materials have already been refined, they can yield a much higher concentration of 25–30 percent usable REEs.
As approximately 8 percent of the world’s carbon footprint comes from the global metals and mining industry, overcoming these sophisticated processing hurdles is an enormously important undertaking. Successfully recycling REEs from end-of-life products means not only reclaiming precious non-renewable materials from landfills, but also building more resilient supply chains. If we could shift from traditional mining to these “urban mines,” the industry could reduce water usage by up to 95 percent and lower carbon emissions by 61 percent, turning a process that is currently “almost impossible” into a way to make technology sustainable.
Coming of age
But, as political tensions between Japan and China eased and prices dropped, so did the agenda. Today, global production of REEs is still heavily concentrated in China. According to Buchert, it holds “more or less a total monopoly,” accounting for 69 percent of mining production and 90 percent of processing in 2023. Climate aside, this concentration leaves the global market vulnerable. As recently as April and October 2025, China implemented strict new export controls on specific heavy REEs and magnet technologies, citing national security interests in light of Trump’s tariffs.
The Western world is now playing catch-up. “For the last two to three years, the global demand has been increasing again,” Buchert notes, particularly for EVs and wind power. He describes the REE recycling industry as being in its “teenage phase.” While there have been “a couple of research and development projects over the past few years,” the industry, at least in the West, has yet to reach the “adulthood” seen in sectors like aluminium recycling.
“In Europe and North America, we’re in the first steps of recycling. In the next five years, there’s huge potential to get more independent from third-party countries,” Buchert explains. This shift is supported by policy; the EU’s Critical Raw Materials Act (CRMA) mentions permanent magnets several times, acknowledging that securing these materials is a “strategic issue.”
REE recycling is—finally—ramping up
Industrial-scale projects are finding success. Buchert was hopeful about research project ReDriveS, funded by the German Federal Ministry for Economic Affairs and Energy (BMWE). It focuses on automated and digitised circular economy solutions for electric axle drives, and is now entering its implementation phase. It uses digital twins and automated dismantling to make motors easier to recycle from the very beginning.
Commercial progress is also accelerating. On 15 January 2026, HyProMag, founded by world experts in the field of rare earth magnetic materials, alloys and hydrogen technology, inaugurated the UK’s first commercial rare earth magnet recycling and manufacturing facility in Birmingham. The facility uses Hydrogen Processing of Magnet Scrap (HPMS) technology to produce up to 300 tonnes of NdFeB magnet blocks per year.
This project represents the first commercial production of rare-earth permanent magnets in the UK in 25 years; veritable proof that the Western world is starting to take REE recycling seriously. Following its success, there are plans to build a second plant in Germany and potentially Canada, according to Buchert.
Projects like Cyclic Materials’ $82 million recycling campus in South Carolina serve as a testament to this momentum. The company aims to produce 600 tonnes of recycled Mixed Rare Earth Oxides annually. The company is eschewing traditional “shred-and-sort” methods, which often lose precious rare earth powders in the resulting dust. Instead, their facility employs a two-stage hydrometallurgical process which first isolates magnets from complex assemblies, such as EV motors, wind turbines, and MRI machines, before refining the recovered material into high-purity Mixed Rare Earth Oxides (rMREO). Their proprietary hydrometallurgy system is able to capture copper, aluminium and nickel alongside REEs, making the facility essentially a high-efficiency urban mine. And, thanks to the increasingly strict ESG regulations of 2026, the company ensure their products are completely traceable with Digital Product Passports.
As we scale up green infrastructure, these innovations suggest a future where the technologies designed to help us live sustainably do not have to come at the cost of environmental degradation or global instability.
