China's scandium export controls have changed the ground rules for sourcing solid oxide fuel cell (SOFC) materials. When China's Ministry of Commerce (MOFCOM) added scandium to a list of seven medium and heavy rare earth elements under Announcement No. 18 on April 4, 2025, the price of scandium oxide (Sc₂O₃) roughly tripled — from about $1,200/kg before the controls to $3,500–4,370/kg after. The key point up front: this is not an embargo but a case-by-case licensing regime, and buyers who can document civilian end use and diversify their supply base can still procure.
What Was Controlled, and When
Announcement No. 18, issued April 4, 2025, placed seven medium and heavy rare earths — scandium among them — under export controls covering their metal, alloy, oxide, compound, and mixture forms. The mechanism that matters is that every export shipment now requires a MOFCOM license. This April tranche remains in force as of July 2026.
The regime then tightened once more. In October 2025, five additional items were added and the extraterritorial reach was strengthened, so that third-country products containing Chinese-origin content above a threshold could also fall under the rules. However, a November 2025 US–China agreement suspended the October tranche for one year, to 10 November 2026 unless extended. The distinction that trips buyers up: the suspension applies to the October tranche, not the April tranche that includes scandium.
If you are designing a contract that runs past 10 November 2026, treat the October 2025 items as controlled unless the extension has been confirmed.
Why SOFCs Take a Direct Hit
Ohmic loss through the electrolyte is often the dominant single loss term in a well-built cell, which is what makes the material choice decisive — though in anode-supported thin-film designs, where the electrolyte is only 5–15 µm, cathode oxygen-reduction kinetics generally dominate area-specific resistance instead. A widely used high-performance electrolyte, 10Sc1CeSZ, is a scandium-stabilized zirconia composed of roughly 87.6 wt% zirconium and hafnium oxides (ZrO₂ + HfO₂), about 11 wt% scandium oxide (Sc₂O₃), and about 1.4 wt% cerium oxide (CeO₂). Announcement No. 18 covers the controlled elements in oxide, compound, and mixture form with no concentration-floor threshold, so both the electrolyte powder and its scandium oxide feedstock fall within the controlled scope — an 11 wt% grade and a lower-scandium grade alike, which is why a low-content argument is weak here. The physical side of that same specification — D50 0.4–0.6 µm and a specific surface area of 8–12 m²/g — is fixed per order and pinned to a named measurement method on the COA rather than published as a catalogue band; the grade itself sits on our 8YSZ & ScSZ electrolyte powders page.
Scandium's scarcity is in production rather than in the ground: its crustal abundance exceeds lead, tin, and silver. With almost no economically viable standalone mines, it is recovered as a byproduct of nickel-cobalt laterite processing, bauxite residue, titanium, rare earth, and uranium refining, and estimates of global output cluster around 40 tonnes a year of Sc₂O₃ — an estimate rather than a reported statistic, since the USGS declines to publish a firm global total. Layering export controls on top of that structural scarcity amplified both price and lead-time volatility. For the background on why scandium is so scarce, see Scandium: the metal produced at just 40 tonnes a year.
Why "Licensing" Is Not "Embargo" — and Why It Matters
A licensing regime and an embargo call for entirely different procurement strategies. Under licensing, export is not prohibited outright; each shipment is reviewed and approved or denied case by case. The early pattern in practice was that Chinese producers allocated their limited licensing bandwidth to large, long-term contracts first, winding down small, low-value spot orders.
The flip side is that contracts with a clearly identified end user and documented civilian use have room to clear the licensing gate. MOFCOM's stated policy is denial for military end use; dual-use applications with a plausible military pathway draw the heaviest scrutiny, and clearly civilian uses are selectively approved on end-user and end-use documentation. The three-step approach — confirm whether an item is controlled, design a licensing track, and run a non-China alternative in parallel — is laid out in Procurement strategy in the age of export controls.
Procurement Response: Dual Sourcing and Contract Defense
This episode exposed the risk in depending on a single country of supply. The response rests on two pillars.
- Dual sourcing: Run a price-competitive China licensing track alongside a non-China track. That track can include Japanese refiners with core process technology, US fuel-cell materials specialists, and domestic Korean production — none of which is an uncontrolled jurisdiction, since the US, Japan, and Korea administer their own export-control regimes, and a non-China refiner may itself run on Chinese Sc₂O₃. Compare each track across quality, price, lead time, and regulatory risk in a matrix and allocate accordingly. The supplier landscape is mapped in The ScSZ electrolyte supplier landscape.
- Contract defense clauses: Insert an Export License Contingency clause triggered by a deadline — if the license has not issued within an agreed number of days, either party may terminate and the seller refunds any advance payment. A clause worded "if the license is not granted" often never fires, because MOFCOM outcomes are frequently indefinite silence rather than a written refusal, so secure the refund with an advance-payment guarantee or escrow, or tie payment to license issuance. On Incoterms, the useful rule is to avoid EXW, which nominally puts Chinese export clearance on the foreign buyer — a role that buyer generally cannot hold, since the license must be applied for by the Chinese exporter of record. Every other Incoterms 2020 rule already places export clearance on the seller, so the choice among them does not shift license risk.
Price Impact at a Glance
Scandium oxide prices roughly tripled across the control threshold. That flows directly into the cost structure of SOFC electrolyte powders, and the higher the scandium content of a grade, the larger the effect.
Frequently Asked Questions
Is the scandium export control a total embargo?
No. Announcement No. 18 (April 2025) is a licensing regime requiring a MOFCOM license per shipment. Export is not prohibited outright; approval depends on an end-user and end-use review. Documented civilian use has room to be approved. MOFCOM's stated policy is denial for military end use, and dual-use applications with a plausible military pathway draw the heaviest scrutiny.
Did the November 2025 US–China deal lift the scandium controls?
No. What was suspended is the tranche added in October 2025 — a one-year suspension expiring 10 November 2026 unless extended. The April 2025 tranche that includes scandium is not covered by the suspension and remains in force as of July 2026.
Why does the SOFC electrolyte fall under the controls?
The leading high-performance electrolyte, 10Sc1CeSZ, contains about 11 wt% scandium oxide. Announcement No. 18 covers scandium in oxide, compound, and mixture form with no concentration-floor threshold, so both the electrolyte powder and its scandium oxide feedstock fall within the controlled scope. A lower-scandium grade is in scope on the same basis, which is what makes a low-content argument weak.
How ready are alternative sources?
Commercial non-China recovery already exists — Rio Tinto Fer et Titane has produced scandium oxide from titania slag at Sorel-Tracy, Quebec, and Philippine scandium comes from operating nickel-laterite HPAL circuits — but at volumes small against demand, while Australian projects remain at an early commercialization stage. In the near term, running a China licensing track in parallel with non-China tracks in Japan, the US, and Korea is the practical response.
References (Public Sources)
- China MOFCOM Announcement No. 18 (April 4, 2025)
- Holland & Knight, analysis of China export controls (April 2025)
- Pillsbury, analysis of the US–China agreement and suspension (November 2025)
- lanthanides.io, scandium oxide pricing data
The tranche that covers scandium is still in force, so every scandium shipment out of China turns on a licence that the Chinese exporter, not the buyer, has to obtain. Nami Tech Solutions (NTS) approaches mills on the licensed China track and on the non-China track directly and against the same written specification, and puts the licence contingency, the security for any advance payment and the Incoterms choice into the contract rather than leaving them to the shipment.
