According to The New York Times, supply is finally beginning to catch up with demand in the rare earth element market.

A few months ago, I posted about the Chinese government’s export restrictions on rare earth elements. The bad news for the lighting industry was that China’s nationwide production cap was causing the price of fluorescent light bulbs to rapidly increase. (Rare earth elements are a crucial component to the process of creating a fluorescent light bulb).

However, it seems that international prices for rare earth elements have fallen since August and are continuing to decline! The timeline for the impact on the lighting industry is unclear at this point. For more information, read this article.

A mine in Baiyun Obo, which produces half the world's rare earth elements. Photo courtesy of Treehugger.

Remember our post on why fluorescent light bulbs are becoming more expensive?

Well, the Chinese government is beginning to enforce those export restrictions on rare earth elements. According to an article in Times LIVE, China’s Ministry of Industry and Information Technology will now punish rare earth producers that fail to stick to the nationwide production cap.

Enterprises exceeding quotas will have licenses cancelled, and will also face government action if they are caught buying ore from mines that violate government guidelines.

It is unclear whether the production cap for 2011 of 93,800 tonnes has already been met, but a number of plants have closed down.

What does this mean for fluorescent lighting? For a fluorescent light bulb to create light, there must be a phosphor coating inside its glass envelope. While phosphor is not a rare earth element, rare earth elements are a crucial component to the process of creating the light-producing tri-phosphors inside the lamps.

The production cap is meant to crack down on illegal production of rare earth elements. However, since China produces about 97 percent of the global supply, the policy is affecting the production of countless products in the green tech industry that count on rare earth minerals.