A rapid increase in electric cars and offshore wind turbines might not be sustained, the Government has been warned, because of a shortage in a number of key metals.
Current production of both requires considerable amounts of rare earth metals, valued for their magnetic capacity and resistance to high temperatures.
However, the world may now face shortages as China, which produces 95 per cent of the metals, cuts back on exports to concentrate on manufacturing and exporting higher value goods.
A report prepared for the Department for Transport by the consultants Oakdene Hollins warns that the combined demand from wind turbines and hybrid/electric cars for neodymium (used in wind turbine generators) and lanthanum (used in batteries) is predicted to exceed all but the 'most optimistic supply scenarios'.
It says UK plans for offshore wind farm capacity alone would lead to an average demand for neodymuim in 2020 of over 12 per cent of the total global supply in 2014.
Overall demand for rare earth metals is predicted to grow at 8-11 per cent a year between now and 2014.
The report says the US and others have responded by seeking to develop new mines of their own, with Canada, Australia, Malaysia and Greenland known to contain significant reserves.
However, these will take as long as four years to open and more importantly would come at an environmental cost in terms of land use, extraction cost, water and chemical usage and biodiversity loss.
'If you are trying to decarbonise the transport sector you don't want another biofuels situation - [where] you are trying to solve one problem but you end up creating another,' said report author Dr Hudai Kara.
Alternatives to magnets used in electric car motors are currently limited but the report says a number of alternatives for batteries are currently being researched. It urges the UK to focus, like Japan, on research into the life extension of products and better recycling techniques for recovering the metals.
The Department of Transport said it was currently considering the findings but would not comment on their significance to the development of the low carbon transport sector.
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