Commerce Publishes Temporary Final Rule Restricting Export of “Black Mass” From Shredded Battery Scrap

The U.S. Department of Commerce, Bureau of Industry and Security (BIS) published on August 6, 2026, a temporary final rule (the Rule) titled “DPAS Directive Allocation Order and Additional Requirements for Recoverable Critical Minerals and Materials” to restrict the exportation of black mass and tungsten waste and scrap. According to BIS, “this temporary rule is necessary to immediately secure the supply of certain recoverable [critical minerals and materials] CMMs to ensure an adequate supply of these materials deemed essential to the national defense.” Specifically, the Rule requires that U.S. persons engaged in the sale of black mass and tungsten waste and scrap must allocate 100 percent of monthly sales to U.S. persons, unless an adjustment or exception is obtained in advance from BIS. “Black mass” is defined in the Rule to mean “any shredded lithium-ion battery scrap that contains cathode material (which may include aluminum, copper, iron, lithium, cobalt, nickel, and manganese), anode material (graphite, silicon) or other residual battery cell materials.”

As authority for the export restrictions, BIS cites a July 30, 2026, Presidential Determination on Recoverable Critical Minerals and Materials (the Determination) which designates critical minerals and materials as “essential to the national defense.” The Determination, made under Section 101 of the Defense Production Act (DPA) of 1950, directs the Secretary of Commerce to take all appropriate action within the position’s authority to carry out the Determination, including through implementation of rules and regulations. BIS also cites to the DPA as the authority for forgoing typical rulemaking processes (i.e., public notice and comment) required under the Administrative Procedures Act (APA).

Of note, black mass and tungsten are only a few of the identified CMMs. The term “critical minerals and materials” includes minerals as defined in Executive Order 14241; strategic and critical materials, as defined in 50 U.S.C. 98h-3; critical materials, as defined in section 7002(a)(2) of the Energy Act of 2020, Public Law 116-260, 134 Stat. 1182, 2562; and any mineral or material the Secretary of Commerce designates as a CMM. The Rule suggests that the Department of Commerce may consider further directives — on additional substances — to meet national defense objectives.

The export restrictions become effective on August 27, 2026, and currently last through August 27, 2027, though BIS may adjust or extend those dates at any time. The Rule notes that BIS, in its discretion and upon request, may authorize both company-specific and generally applicable adjustments or exceptions to the requirements, and interim relief — i.e., a Defense Priorities and Allocations System (DPAS) temporary license — while a request is pending. BIS expects to review any such requests within 14 days of receipt. While the authority to grant exceptions appears fairly open-ended, BIS includes several example scenarios where an exception might be warranted, including demonstration of “undue or exceptional hardship,” when the result would be contrary to national defense (i.e., would ultimately reduce the domestic supply of CMMs), if a company plans to sell/export for processing/refining outside the United States but then return the CMMs to the United States, and others.

Requests for adjustments and exceptions must be made in writing and provided to BIS via DPASAllocations@bis.doc.gov. BIS advises that such requests contain a complete statement of all the facts and circumstances related to the domestic sales requirement from which relief is sought and a full and precise statement of the reasons why relief should be provided, along with relevant supporting documents or data to support the request.

Public comments on the Rule can be submitted by November 4, 2026. The docket for the rulemaking is BIS-2026-0364, and BIS requests that all submitters refer to Regulatory Information Number (RIN) 0694-AK51 in comments.

The Rule comes amid a flurry of federal activity on CMMs over the last several years. President Trump, for example, has signed a number of recent Executive Orders, including Executive Order 14415, intended to protect domestic defense supply chains and ensure access to critical materials; Executive Order 14241, aimed to expedite permitting processes for critical mineral mining projects on federal lands, specifically directing agencies to expedite the mining of copper, uranium, gold, and potash in addition to the critical minerals listed by the U.S. Geological Survey (USGS); and Executive Order 14285, which directs agencies to explore and extract critical minerals through deep-sea mining.

Congress is similarly engaged. The House Committee on Energy and Commerce, for example, held a hearing on June 24, 2026, titled “Trash to Treasure: Examining Legislation to Support Domestic Critical Mineral Recovery and Recycling” to discuss seven bills aimed at reducing unnecessary barriers to the growth of a strong domestic recycling industry, to establish the U.S. Environmental Protection Agency (EPA) as a leader of interagency efforts to recover critical minerals, and to support the remediation of contaminated sites while identifying new domestic sources of valuable materials. As noted by Subcommittee on the Environment Chairman Gary Palmer (R-AL), the “United States is entirely reliant on imports for 13 of the 60 mineral commodities on its 2025 list of critical minerals. And it is reliant on imports for over half of its consumption of another 20 minerals. Removing regulatory barriers to a more robust domestic recycling industry could allow us to recover more of these minerals from products already in the United States. Deliberate federal coordination has never been more important….” The Subcommittee on Environment also held a hearing on management of coal combustion residuals and evaluated the potential recovery of critical minerals from coal ash in June 2025, met to assess the state of the domestic recycling industry and opportunities to recover critical minerals from end-of-life electronics in July 2025, and has identified opportunities to modernize major environmental laws to eliminate unnecessary barriers to stronger supply chains.

The Department of Energy (DOE) has also taken significant actions related to CMM recovery. In March 2026, DOE announced via a press release a Notice of Funding Opportunity (NOFO) for up to $500 million “to strengthen domestic critical materials processing and manufacturing.” Funding awarded through the NOFO is intended for facilities processing, recycling, or utilizing for manufacturing critical materials which may include traditional battery minerals such as lithium, graphite, nickel, copper, aluminum, as well as other minerals contained within batteries. DOE has a webpage dedicated to critical materials projects.

Commentary

Although action to keep black mass and tungsten “on shore” was perhaps not all that surprising given the national conversation on CMMs and this Administration’s focus on reducing reliance on foreign adversaries, the speed at which the export prohibition is occurring is highly irregular. There were a mere two business days between release of the July 30, 2026, Determination and when the pre-publication, public inspection copy of the Rule was made available in the Federal Register, on August 4, 2026. The prohibition on exporting these materials will kick in less than a month after President Trump gave the authority to the Secretary of Commerce to act. And this may be only the beginning. BIS notes that it “may issue additional allocation orders as required to meet the objectives of DPA Determination on Recoverable CMMs,” meaning potential future export restrictions on other critical minerals and materials.

Industry reactions on the Rule — which will presumably have the effect of increasing business and creating new opportunities for domestic recyclers — have been mixed. Several domestic recycling companies have voiced support for the measures, citing the benefits of ensuring a more consistent feedstock to spur investment in increased processing capacity. Others have cautioned that the export prohibition overlooks current industry dynamics, including U.S. labor and construction costs and whether there are sufficient capacity and capability to handle volumes that will now need recycled domestically. As of this writing, some of the major battery trade associations have yet to weigh in with definitive views.

Bergeson & Campbell, P.C. (B&C^®) would note that the Rule also does not address concerns with respect to the current regulatory environment for recycling/reclaiming CMMs, including potential permitting requirements, hazardous waste designations, and more. EPA, for example, enforces hazardous waste rules under the Resource Conservation and Recovery Act (RCRA) that can significantly impact domestic processing of black mass. EPA also reviews new chemicals used in batteries under the Toxic Substances Control Act (TSCA) and has imposed restrictions on how scrap materials containing those chemicals can be distributed and recycled. Policymakers should ensure alignment between these RCRA and TSCA requirements and the Rule, avoid unnecessary duplication or inconsistency, and explore opportunities to provide flexibilities to support the domestic recycling industry without compromising protections for health and the environment.

Companies that have direct or indirect interests in critical materials and minerals — especially those that rely on foreign processing of such materials — should take note of what is happening in the Rule with respect to black mass and tungsten and how fast it is happening. Consider commenting on this rulemaking to at least make BIS aware of the regulatory issues under RCRA and TSCA. Finally, make sure you understand where CMMs may be in your supply chain and discuss implications with your commercial partners — including impacts from potential future expansion of the BIS export restrictions to other materials. In the near term, if export of black mass or tungsten is a commercial necessity, companies are advised to expeditiously begin preparation of a request for exception or adjustment to submit to BIS.