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APPENDIX 7B. RARE EARTH PHOSPHOR AVAILABILITY AND PRICING

T ABLE OF CONTENTS

INTRODUCTION AND PURPOSE .............................................................................7B- 1 7B .1
RARE EARTH PHOSPHOR COMPOSITION ............................................................7B- 2 7B .2
SUPPLY CHAIN AND APPLICATIONS ....................................................................7B- 3 7B .3
RARE EARTH MARKET .............................................................................................7B- 4 7B .4
IMPACT OF STANDARDS .........................................................................................7B- 5 7B .5
REFERENCES ..........................................................................................................................7B- 7

L IST OF TABLES

Table 7B.2.1 General Chemical Formulas for Key Phosphors ..................................................7B- 2

Ta ble 7B.2.2 Average Rare Earth Phosphor Composition ........................................................7B- 3

L IST OF FIGURES

Figure 7B.3.1 Rare Earth Application by Volume ....................................................................7B-47B

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APPENDIX 7B. RARE EARTH PHOSPHOR AVAILABILITY AND PRICING

INTRODUCTION AND PURPOSE 7B.1

The U.S. Department of Energy (DOE) has identified high er efficiency phosphors as a technology option that can be used to increase the efficacy of general service fluorescent lamps (GSFLs). (See chapter 3 of this preliminary technical support document [TSD].) Specifically, the use of narrow-band rare earth phosphors (containing the rare earth elements yttrium[Y], europium [Eu], and terbium [Tb]) can improve lamp efficacy by increasing ultraviolet ( UV ) radiation absorption and emission of radiation in the visible spectrum relative to other phosphors. DOE is considering higher efficiency phosphors as a design option in this rulemaking.

Manufacturers expressed concern during the previous energy conservation standards
rule making, published in July 2009 (hereafter, the “2009 Lamps Rule”) that higher GSFL
standa rds would necessitate large increases in the demand for the more costly rare earth phosphor ble nds. a 74 FR 34080 (July 14, 2009). Depending on the lamp type, rare earth phosphors can be the highest input material cost of a GSFL. Thus, in the 2009 Lamps Rule, DOE analyzed the rare earth phosphor market and concluded that the rare earth phosphor supply would meet the expected increased demand of rare earth phosphors that would result from energy conservation standards. For this rulemaking, manufacturers again expressed concern that
li mited rare earth availability (due to restrictions from China) would increase costs substantially.

S ee chapter 2 of this TSD for more details. China, which controls at least 97 percent of the rare

e arth market, has added tariffs and capped exports; the production quota in 2011 was 21 percent
less than in 2010. 1

At the time of this analysis, many manufacturers b had been granted exception relief exempting their 700 series T8 lamps from the standards adopted by the 2009 Lamps Rule ( requ iring compliance in July 2012, hereafter “July 2012 standards”) for a period of two years.
The waiver was granted due to the global supply restrictions on rare earth phosphors, the rising world demand of these phosphors, and the resulting impacts on producing higher efficacy

GSFLs. 2

DOE understands that supply and demand of rare earth phosphors should be considered when evaluating amended standards for GSFLs. Therefore, DOE is assessing the potential
im pact of standards that may result from this rulemaking on the requirement for rare earth phosphors and subsequent cost to the consumer. This appendix reflects DOE’s preliminary findings.

a The full text and all related documents of the 2009 Lamps Rule can be found on regulations.gov, docket number

EERE- 2006 -STD- 0131 , at www.regulations.gov/#!docketDetail;D=EERE- 2006 -STD- 0131

. b At the time of this analysis, the following manufacturers had been granted exception relief exempting their 700 series T8 lamps from current standards: Philips, GE, OSI, Ushio America, Halco Lighting Technologies, Premium Quality Lighting, Inc., Tailored Lighting, Inc., Litetronics International, Inc., Satco Products, Inc., DLU Lighting USA, Westinghouse Lighting Corporation, Ascent Battery Supply, LLC, Eiko, Ltd, and Topaz Lighting Corporation.7B

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RARE EARTH PHOSPHOR COMPOSITION 7B.2

Rare earths are commercially defined to include 17 elements that have similar chemical

prop erties. A small subgroup of these rare earth elements exhibit luminescence, some of which are critical to high-performance GSFLs. During the operation of common GSFLs, cathodes that seal each end of the lamp emit a flow of electrons that reacts with mercury vapor in the lamp and emits invisible UV radiation. To convert this UV radiation into visible light, manufacturers coat the inside of the lamp’s glass with a fluorescent powder of blended elements, or phosphor. These phosphors generate visible light when struck by UV rays. In high-performance GSFLs, this phosphor ble nd includes rare earth materials.

The phosphor powders that manufacturers use in GSFLs can be divided into two groups: halophosphor blends and triband phosphor blends, the latter of which contain rare earth

e lements. Halophosphor blends are much less costly than those containing rare earth elements, but halophosphor blends are also less efficient and produce lower quality light. For some less efficacious GSFLs, manufacturers coat the lamp glass tubes with only halophosphor blends.

How ever, fluorescent lamps now use three narrow-band rare earth phosphors (containing Y, Eu

, and Tb) that emit light in the short, middle, and long wavelength ranges ( i.e. , near 450, 550, and

610 nm 3 ) of the visible spectrum. Lamps that meet the July 2012 standards predominately use triband phosphors; the more efficient fluorescent lamps exclusively use these triband phosphors. 4

Co ating a lamp with a layer of triband phosphors, in addition to or in place of halophosphors, increases efficacy while dramatically improving color quality and lumen maintenance. The precise blend and weight of the phosphor mixes also influence the color correlated temperature (CCT) and the color rendering index (CRI).

Generally, in high-performance GSFLs, manufacturers combine a blend of three rare earth phosphors: one that emits green light, one that emits red light, and one that emits blue light.
The se “triband” or “triphosphor” lamps require the use of varying amounts of rare earth elements (in addition to other elements) in the red, green, and blue phosphors. Specifically, there are five
critical or near-critical rare earth elements that are commonly used in the triband phosphor blends: Y, Eu, Tb, lanthanum (La), and cerium (Ce). These elements work to emit light at the

wa velengths to which human eyes are most sensitive. Y and Eu are used in the red phosphor; Tb,

L a, and Ce are common to the green phosphor; and Eu is used in the blue phosphor. Table 7B.2. 1 displays general chemical formulas for each color phosphor (there are two common options for blue)

.

Table 7B.2.1 General Chemical Formulas for Key Phosphors

Phosphor Color Chemical Formula
Red Y 2 O 3 :Eu

Green LaPO 4 :Ce,Tb

Blue #1 BaMgAl 10 O 17 :Eu
Blue #2 (Sr,Ca,Ba) 5 (PO 4 ) 3 Cl:Eu

After each color phosphor is manufactured, the phosphors are blended together for use in
triban d phosphor fluorescent lamps. The triband phosphor typically contains 60 percent rare earths by weight. The amount of rare earth material in each phosphor color can vary by7B

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manufacturer and application requirements. Table 7B.2.2 presents a breakdown of the average rare earth composition of triband phosphor. 5

Table 7B.2.2 Average Rare Earth Phosphor Composition

Element Total Rare Earth Content
Lanthanum 22.0%
Cerium 6.5% Europium 4.5%
Terbium 5.0%
Yttrium 62.0%

SUPPLY CHAIN AND APPLICATIONS 7B.3

Hundreds of mining firms, mostly in China, extract rare-earth-containing material from
the ground. Rare earths are mined primarily from bastnӓsite, monazite, and xenotime ores, as well as ion-adsorption clay. Naturally mixed in with many other elements, rare earths must be concentrated through a series of separation processes to distill the rare earth elements from the

ore. Most of the mining firms also perform the initial stages of this concentration process. The
two pr incipal means of separating rare earths are solvent extraction and ion exchange, either of which can yield purities up to 99.999 percen t. 6 The most critical rare earths for lighting

a pplications are Y, Eu, and Tb. Very high levels of purity (99.99 percent or greater) are necessary for these phosphors in lighting applications, which increases the cost to lamp
manuf acturers. One of the difficulties associated with processing rare earths such as Y, Eu, and
Tb

, is that achieving the required purity levels can be very expensive, requiring these mining companies to find markets for other materials beyond rare earths such as indium, gallium, and

g ermanium. These byproducts are subject to large fluctuations in price, which can affect the market for the key rare earths for lighting as a result. 7

Next, the concentrated rare earth product is usually shipped to a handful of phosphor

ma nufa cturers who further process the rare earths to higher levels of purity and/or manufacture the phosphor

. For lighting applications, the phosphor manufacturer may sell the individual

c olored phosphors or the mixed triband phosphor to lamp manufacturers. In other instances, lamp manuf

acturers may perform the phosphor blending in

- house.

Rare earth materials, including phosphors, have found an increasing range of practical

a pplications in recent decades. Aside from the energy efficien cy applications, rare earths are used in automotive catalysts, metals and magnets, petroleum catalysts, glass polishing, and

c eramics. The industry has also experienced significant demand growth in recent years for use in

e lectric and hybrid vehicles. In particular, Y and Eu are used in communication devices and asthe red phosphor in televisions and liquid crystal displays (LCDs). Y is also used as a strengthe nhancing additive to alloys of aluminum and magnesium and as an electrolyte component in
fuel cells. Tb is utilized in electric motors and as an additive to neodymium-iron-boron permanent magnets. La and Ce are used as additives in fluid catalytic cracking processes for

pe troleum refining, and are also employed in nickel metal hydride batteries such as those found
in h ybrid and electric vehicles. 8 97B

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Figure 7B.3. 1 shows the market breakdown of rare earth oxide c 10 demand in 2010. 11 As of 2010, phosphors account for about 7 percent of rare earth consumption. There are three main applications within this subgroup : tele visions (plasma, LCD, and cathode ray tube), triband phosphor f

luorescent lamps, and X-ray intensifying screens. Currently, there are few, if any,
suit able substitutes in most applications, including high-efficiency GSFLs.

Figure 7B.3.1 Rare Earth Application by Volume

Source: Industrial Minerals Company of Australia, March 2011.

RARE EARTH MARKET 7B.4

Historically, unstable supply and demand and significant price fluctuations have been the norm in the rare earth market. The 1980s saw rapidly increasing demand, followed by substantial oversupply in the 1990s when China entered the market and quickly established a dominant

mar ket position. 12 Prior to China’s arrival as the dominant supplier of rare earths, most production came from the United States. By the late 1990s, China’s low-cost supply had driven down prices, causing many U.S. suppliers to cut or cease operations. China currently controls

roug hly 97 percent of the rare earth market and has continued to impose significant supply constraints through the use of export quotas and tariffs. 13 These restrictions have gradually increased in strictness between 2005 and 2011. However, development of several large scale rare

e arth production facilities in the United States, Australia, and South Africa is expected between 2012 and 2015. Major rare earth mining companies opening these new facilities include
Mol ycorp, Great Western Minerals Group, Lynas Corporation, and Alkane Resources. 14

Demand for rare earth phosphors is projected to grow rapidly through 2015. Trends towards greater energy efficiency and growth in compact fluorescent lamps (CFLs) are driving
thi s increase in demand, though long-term forecasts indicate a slowing of this trend due to

c Rare earth elements have a strong affinity for oxygen and th erefore are mainly present as oxides and reported in
terms of rare earth oxides. Magnets, 21%

Metal Alloys,

18%

Catalysts, 20% Polishing, 15% Glass, 9% Phosphors, 7%

Ceramics, 6% Other, 6%7B

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increasing prevalence of light-emitting diode (LED) lamp s. Due to the unstable supply and demand, rare earth phosphor prices are currently extremely volatile, with price increases of up to

500 percent for Eu and Tb. 15 For additional information on the rare earth market, refer to the DOE Critical Materials Strategy (CMS) d and the Decision and Order considering the Applications for Exception filed by Philips Lighting Company, GE Lighting, and OSRAM SYLVANIA, Inc. granted by the DOE Office of Hearing and Appeals. e

IMPACT OF STANDARDS 7B.5

DOE recognizes significant price increases of rare earth phosphors are likely given the

a ctions of China and expected increase in demand. Therefore, DOE conducted a sensitivity

a nalysis to address the potential increases in end-user lamp prices attributable to greater phosphor input costs. DOE compared the life-cycle cost (LCC) savings due to purchasing higher efficacy GSFLs (as calculated in chapter 8 of this TSD) to LCC savings under scenarios with hig her phosphor prices. Additionally, in the national impact analysis (NIA), DOE conducted a sensitivity analysis that evaluated the impact of rare earth phosphor prices by developing shipment scenarios based on high, medium, and low prices of rare earth phosphors. (See chapters 9, 10

, and appendix 9B of this TSD for further details of this analysis.)

To analyze the impact of higher phosphor prices on the consumer, DOE compared the LCC savings due to purchasing higher efficacy GSFLs (as calculated in chapter 8 of this TSD ) to LCC savings from these purchases in a scenario with higher phosphor prices. For this analysis,

DO E assumed that the cost of the lamp to the end-user would need to increase by at least the same amount as the LCC savings before the cost of rare earth phosphors negatively impacted consumer savings. Because the LCC savings represent savings to the end-user, DOE divided LCC savings by the markup used in the manufacturer impact analysis (MIA) of the 2009 Lamps
Rule to determine how much the rare earth phosphor manufacturing cost would impact the enduser. DOE assumed that this cost increase would be attributable only to the increase in the cost of rare earth phosphors.

DOE first determined the quantity of rare earth phosphor required to achieve the desired efficacy of GSFLs in each product class ( i.e. , b y lamp type) using the high-efficiency (800 and 800P series) fluorescent lamp estimates provided in the CMS. DOE then determined the cost of the rare earth phosphors to the manufacturers considering the quantity of each phosphor required and the current estimated cost of each phosphor type. DOE calculated that the average cost per weight to manufacturers of rare earth phosphor used in the fluorescent lamps covered is

a pproximately $0.20 per gram at current phosphor prices. Next, by applying manufacturer and

re tail markups, DOE analyzed how much this rare earth phosphor cost could increase before it would negatively impact LCC savings for each candidate standard level (CSL). DOE focused on CSLs that had been determined to result in positive LCC savings.

d U.S. Department of Energy . Critical Materials Strategy . December 2011. Accessible here: http://energy.gov/sites/prod/files/DOE_CMS2011_FINAL_Full.pdf

.

e Philips Lighting Company, et al. OHA Case Nos. EXC- 12 -0001, EXC- 12 -0002, EXC- 12 -0003 (2012). Accessible

here: http://energy.gov/sites/prod/files/oha/EE/EXC- 12 -0001thru03.pdf

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For the 2 -lamp instant start (IS) system pairing in the 4-foot medium bipin (MBP)

pr oduct class, phosphor prices could increase more than three times before negatively impacting

L CC savings at both CSL 1 and CSL 2. For the 2-lamp programmed start (PS) system pairing in the 4-foot MBP product class, phosphor prices could increase at least five times before resulting in negative LCC savings at CSL 2 for the reduced wattage representative lamp units. Consumers
fa ce negative LCC savings for this system pairing at CSL 1 and at CSL 2 for the full wattage

re presentative lamp unit.

For the 4-lamp IS system pairing in the 4-foot MBP product class, phosphor prices could increase at least three times at CSL 1 and at least two times at CSL 2 before negatively impacting LCC savings. For the 4-lamp PS system pairing in the 4-foot MBP product class, phosphor prices could increase more than five times before resulting in negative LCC savings at CSL 2 for the reduced wattage representative lamp units. Consumers already face negative LCC savings at

C SL 1 and at CSL 2 for the full wattage representative lamp unit.

In the residential sector, for the 2-lamp IS system pairing in the 4-foot MBP product class, phosphor prices could increase 80 percent before consumers would experience negative

L CC savings at CSL 1. For the same system pairing at CSL 2, phosphor prices may only increase 30 pe rcent before resulting in negative LCC savings for a r educed wattage representative lamp unit. Consumers already face negative LCC savings at CSL 2 for the full wattage representative lamp unit and some reduced wattage representative lamp un its f

.

For 8 -foot single pin slimline lamps, phosphor prices can only increase approximately 5 percent before resulting in negative LCC savings at CSL 1. For 8-foot recessed double contact hig h output ( HO ) lamps, consumers experience negative LCC savings at CSL 1.

For 4 -foot T5 miniature bipin (MiniBP) standard output lamps, phosphor prices could increase about 50 percent before consumers would experience negative LCC savings at CSL 1.

S imilarly, DOE determined that for 4-foot T5 MiniBP HO lamps, phosphor prices can increase

a pproximately 70 percent before resulting in negative LCC savings at CSL 1.

B ased on the analysis above, DOE concludes that the CSLs are achievable even with potential va riability in rare earth phosphor prices. DOE will, however, continue to examine the impacts of rare earth phosphor availability in relation to standards for GSFLs during the course of this rulemaking.

f While consumers experience positive LCC savings for the 25 W representative lamp unit in the lamp replacement scenario, they face negative LCC savings for this representative lamp unit in the lamp-and-ballast replacement

scenario.7B

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1 Philips Lighting Company, et al. OHA Case Nos. EXC-12-0001, EXC-12-0002, EXC-12-0003 (2012). ( Last accessed: October 22, 2012.) < http:// www.oha.doe.gov/cases/ee/EXC-12- 0001thru03.pdf

>

2 Ibid.

3 Srivastava, Alok M. and Sommerer, Timothy J. Fluorescent Lamp Phosphors . Interface

. 1998. 7(2): pp. 28-31. (Last accessed: February 1, 2013.)

< http://www.electrochem.org/dl/interface/sum/sum98/IF6-98-Page28-31.pdf >

4 Philips Lighting Company, et al. OHA Case Nos. EXC-12-0001, EXC-12-0002, EXC-12-0003 (2012). ( Last accessed: October 22, 2012.) < http:// www.oha.doe.gov/cases/ee/EXC-12- 0001thru03.pdf

>

5 U.S. Department of Energy . Critical Materials Strategy . December 2011. (Last accessed December 18, 2012. ) < http://energy.gov/sites/prod/files/DOE_CMS2011_FINAL_Full.pdf >

6 “Facts.” Metall Rare Earth Limited. 2011. (Last accessed November 27, 2012.)

< http://www.metall.com.cn/re/facts.htm >

7 American Physical Society Panel on Public Affairs. Securing Materials for Emerging Technologies . American Physical Society and Materials Research Society. Washington, DC. February 2011.

8 U.S. Department of Energy . Critical Materials Strategy . December 2011. (Last accessed December 18, 2012.) < http://energy.gov/sites/prod/files/DOE_CMS2011_FINAL_Full.pdf >

9 U.S. Environmental Protection Agency. Rare Earth Elements: A Review of Production, Processing, Recycling, and Associated Environmental Issues . 2012. National Risk Management Research Laboratory Office of Research and Development: Cincinnati, OH. Report No. EPA
600/R-12/572.

10 Ibid.

11 Kingsnorth, Dudley J. Industrial Minerals Company of Australia. Meeting the Challenges of Supply this Dec ade. Presentation for the Environmental and Energy Study Institute. Washington,

DC

. March 2011.

12 Haxel, Gordon B., Hedrick, James B., and Orris, Greta J. Rare Earth Elements

— Critical Resources for High Technology. United States Geological Survey. November 2002.

13 Philips Lighting Company, et al. OHA Case Nos. EXC-12-0001, EXC-12-0002, EXC-12-0003 (2012). ( Last accessed October 22, 2012.) < http:// www.oha.doe.gov/cases/ee/EXC-12- 0001thru03.pdf

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14 U.S. Department of Energy . Critical Materials Strategy . December 2011. (Last accessed December 18, 2012.) < http://energy.gov/sites/prod/files/DOE_CMS2011_FINAL_Full.pdf >

15 Ibid.