Elements are a new drop, they are primarily for use with the Alchenomicon item you can get to make odd potion effects.
Where to get the Alchenomicon?
Speak to Murlin the Magician inside the Witches Cottage at 31, 59.
To use the Alchenomicon you need a plain healing, mana or soul potion an Element item and an empty potion bottle.
Elements may be used later on in trophy quests if Deccy ever gets around to coding them.