February 26, 2024

Lab-grown diamonds have sparkling price tags, but many have unclear sustainability claims

PHILADELPHIA (AP) — The muffled sounds of hammering and sanding drift to the first floor of Bario Neal, a Philadelphia jewelry store, where rustic artwork that mimics nature hangs on warmly lit walls.

Waiting for one of those rings is Haley Farlow, a 28-year-old second-grade teacher who designed her three-stone engagement ring with her boyfriend. They care about the price and don’t want jewelry that takes its toll on the earth or exploits people in mining. So they plan to buy diamonds grown in a lab.

“Most of my friends are all lab grown. And I think it just fits with our lifestyle and, you know, the economy and what we’re living through,” Farlow said.

In the U.S., sales of laboratory diamonds are up 16% in 2023 compared to 2022, according to Edahn Golan, an industry analyst. They cost a fraction of the stones that are formed naturally underground.

A lab-grown diamond, left, and a natural diamond are on display at Bario Neal, a jewelry store, in Philadelphia. (AP Photo/Matt Rourke)

Social media posts show millennials and Gen Zers proudly explaining the purchase of their lab-grown diamonds for sustainability and ethical reasons. But how sustainable they are is questionable, as diamond making takes a huge amount of energy and many major manufacturers are not transparent about their operations.

Farlow said choosing the lab-grown ring makes it “more special and satisfying” because the materials come from reputable companies. All laboratory diamonds at Bario Neal are made with renewable energy or the emissions required to make them are offset with carbon credits, which pay for activities such as planting trees, which capture carbon.

But that’s not the norm for lab-grown diamonds.

Many companies are based in India, where about 75% of electricity comes from burning coal. They use words like “sustainable” and “environmentally friendly” on their websites, but do not publish their environmental impact assessments and are not certified by third parties. Cupid Diamonds, for example, says on its website that it produces diamonds “in an environmentally friendly manner,” but did not respond to questions about what makes its diamonds sustainable. Solar energy is expanding rapidly in India and there are some companies, such as Greenlab Diamonds, that are using renewable energy sources in their production processes.

A man looks at a polished, lab-grown diamond at Greenlab Diamonds, in Surat, India, Monday, Feb. 5, 2024. Diamonds, whether lab-grown or natural, are chemically identical and made entirely of carbon.  (AP Photo/Ajit Solanki)

A man looks at a polished, lab-grown diamond at Greenlab Diamonds, in Surat, India. (AP Photo/Ajit Solanki)

China is the other major diamond production country. Henan Huanghe Whirlwind, Zhuhai Zhong Na Diamond, HeNan LiLiang Diamond, Starsgem Co. and Ningbo Crysdiam are among the largest producers. None returned requests for comment and posted no details about where it gets its electricity. More than half of China’s electricity will come from coal by 2023.

In the United States, one company, VRAI, whose parent company is Diamond Foundry, operates a so-called zero-emission foundry in Wenatchee, Washington, that runs on hydropower from the Columbia River. Martin Roscheisen, CEO and founder of Diamond Foundry, said via email that the power VRAI uses to grow a diamond is “about one-tenth of the energy required for mining.”

But Paul Zimnisky, an expert in the diamond industry, said companies that are transparent about their supply chains and use renewable energy in this way “represent a very small part of production.”

“It seems like there are a lot of companies that assume it’s an environmentally friendly product, when they’re not actually doing anything that’s environmentally friendly,” Zimnisky says.

A man collects uncut, lab-grown diamonds at Greenlab Diamonds, in Surat, India, Monday, Feb. 5, 2024. Diamonds, whether lab-grown or natural, are chemically identical and made entirely of carbon.  (AP Photo/Ajit Solanki)

A man collects uncut, lab-grown diamonds at Greenlab Diamonds, in Surat, India. (AP Photo/Ajit Solanki)

HOW IT IS DONE

Laboratory diamonds are often created over several weeks, exposing carbon to high pressure and high temperatures that mimic the natural conditions that form diamonds beneath the Earth’s surface.

The technology has been around since the 1950s, but the diamonds produced were mainly used in industries such as stone carving, mining and dental tools.

Over time, laboratories, or foundries, have become better at growing stones with minimal defects. Production costs have fallen as technology improves.

Ulrika D'Haenens-Johansson demonstrates a machine that uses ultraviolet light to determine whether a diamond is natural or needs to be processed.

Ulrika D’Haenens-Johansson demonstrates a machine that uses ultraviolet light to determine whether a diamond is natural or needs to be ‘referred’ for additional testing. (AP Photo/Mary Conlon)

That means diamond growers can produce as many stones as they want and choose their size and quality, causing prices to drop rapidly. Natural diamonds take billions of years to form and are difficult to find, making their price more stable.

Diamonds, both laboratory and natural, are chemically identical and made entirely of carbon. But experts can distinguish between the two, using lasers to pinpoint telltale signs in the atomic structure. The Gemological Institute of America grades millions of diamonds every year.

MARKETING CONTEST

With prices for lab-grown diamonds lower and young people increasingly preferring them, the new diamonds have taken over natural stone’s market share. Globally, lab-grown diamonds now represent 5-6% of the market and the traditional industry is not taking this lying down. The marketing battle has begun.

The mined diamond industry and some analysts warn that lab-grown diamonds will no longer retain value over time.

“In five to 10 years, I think there will be very few customers willing to spend thousands of dollars for a laboratory diamond. I think almost everything will sell for $100 or even less,” Zimnisky said. He predicts that natural diamonds for engagement rings will continue to sell in the thousands and tens of thousands of dollars.

Some cultures view engagement rings as investments and choose natural diamonds for their long-term value. That’s especially true in China and India, Zimnisky said. This continues to be true in the more rural areas of the United States, while lab-grown diamonds have become increasingly popular in the cities.

Paying thousands of dollars for something that will lose most of its value within a few years can leave the buyer feeling cheated, which Golan says is currently a factor working against the laboratory industry.

“If you buy a natural diamond, the story goes that Mother Earth has worked on it for three billion years. This wonderful creation of nature… you can’t tell that story with a laboratory culture,” Golan said. “You quickly make the connection between forever and the lifespan of love.”

“If we want to get really technical here, the greenest diamond is a reused or recycled diamond because it doesn’t use energy,” Zimnisky said.

Page Neal, co-founder of Bario Neal, a jewelry store, poses for a photo at her store in Philadelphia, Wednesday, Feb. 7, 2024. Neal said she co-founded the store

Page Neal, co-founder of Bario Neal, a jewelry store, poses for a photo in her store. (AP Photo/Matt Rourke)

Page Neal said she co-founded Bario Neal in 2008 to “create jewelry of lasting value that would have a positive impact on people and the planet.” All materials in her jewelry can be traced throughout the supply chain. The store offers both lab-grown and natural diamonds.

“Jewelry is a powerful symbol… preserving memories,” she said. “But when we use materials that have caused harm to other people and the environment to create a symbol of love, devotion or identity, it feels contradictory to me. We only want to work with materials that we think our customers would be proud of.”

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