Rare earth elements as strategic catalysts in the global energy transition: market dynamics, import dependence, and geopolitical implications

Rare earth elements (REEs) are indispensable to the global clean energy transition, serving as critical inputs in technologies such as wind turbines, electric vehicles, and advanced batteries. At the same time, the REE supply chain remains highly concentrated, creating significant strategic, economic, and geopolitical vulnerabilities for importing countries. Against this backdrop, this study examines the conditional short-run and long-run dynamic associations between REE import demand and key clean energy transition indicators, with particular emphasis on the roles of renewable energy (RE) deployment, energy efficiency, and economic activity. Using a panel dataset of 24 REE-importing countries for 2000–2023, the study applies the cross-sectionally augmented autoregressive distributed lag (CS-ARDL) approach to capture both short-run and long-run dynamics while accounting for cross-sectional dependence and heterogeneity. The empirical results are interpreted as conditional dynamic relationships rather than as strict causal effects. The findings show that, in the short run, RE expansion, economic growth, and trade openness significantly increase REE imports. In contrast, improvements in energy efficiency and higher industrial value added are positively associated with import dependence. In the long run, RE deployment and carbon dioxide (CO₂) emissions continue to show positive dynamic relationships with REE imports, whereas energy efficiency continues to exert a significant negative influence, indicating that technological progress can play a moderating role in critical mineral demand over time. These results highlight the material intensity of the clean energy transition and the importance of complementing RE targets with resource efficiency strategies, domestic industrial strengthening, and diversified supply chains. The study contributes to the growing literature on critical minerals by providing new empirical evidence on the structural correlates of REE import dependence and by offering policy insights to enhance material security during the transition to a low-carbon economy.