The US Bureau of Industry and Security (BIS) has moved to lock down the domestic supply of battery and tungsten scrap, issuing a rule that could reroute where US e-waste processors and battery recyclers sell their material. This could potentially cut off an export channel some have relied on to move black mass overseas for processing.
Starting August 27, a “US person” selling black mass or tungsten waste and scrap must allocate 100% of their monthly sales to other US “persons” unless BIS grants an adjustment or exception. The temporary final rule, issued under the Defense Production Act (DPA), runs for roughly a year from its effective date.
The order covers tungsten waste and scrap under Schedule B code 8101.97.00.00, along with three codes covering black mass, 8549.13.00.00, 8549.14.00.00 and 8549.19.00.00, when the material meets the rule’s definition.
Tungsten is recoverable from filaments, electrical contacts and heat sinks in end-of-life electronics. Recovered material is generally reprocessed into new carbide products or used as an alloying additive in tool steel.
BIS defines black mass as “any shredded lithium-ion battery scrap that contains cathode material,” anode material or “other residual battery cell materials.”
The domestic sales requirement reaches further than arm’s-length exports.
BIS defined “sale” to include “deliveries to affiliates and subsidiaries of a person” and transfers “from one branch, division, or section of a single entity to another branch, division, or section under common ownership or control.”
That means recyclers transporting black mass to their own foreign-owned processing operations are covered by the same 100% domestic allocation requirement as third-party export sales.
The BIS did carve out a potential path for companies that rely on overseas refining.
The agency stated it will consider adjustments when “a US person plans to sell black mass and tungsten waste and scrap to a person located outside the United States for processing or refining” if the “processed/refined material will be returned to the United States.”
That provision looks tailored to toll-processing deals, where US generators send black mass abroad because domestic hydrometallurgical capacity is still limited, then bring the recovered metals back, according to the document.
The BIS said it will grant adjustments and exceptions “at its discretion” and aims to respond to requests “within fourteen (14) days.”
The rule also gives US Customs and Border Protection authority to intervene at the border.
Covered material “may be detained by CBP while BIS conducts its review of the shipment,” and any shipment swept into a rated order will be “consigned to BIS pending further distribution or agency direction.”
The agency left the door open to expanding the list of covered materials, saying it “may determine that additional materials identified” in the underlying presidential determination “be subject to an allocation order” through future Federal Register notices.
Noncompliance can include pursuing an injunction, and violations are punishable under the DPA’s enforcement provisions.
The BIS tied the action to a July 30 presidential determination finding that recoverable critical minerals and materials are “scarce and critical materials essential to the national defense.” The agency said normal notice-and-comment procedures were bypassed because of “urgent and compelling circumstances.”
Industry groups are already releasing statements about the rule’s potential fallout.
The Recycled Materials Association (ReMA) said it is “currently evaluating the potential impact of this temporary final rule on our membership and the broader industry.” The group has “already scheduled to meet with high-level political officials at BIS next week” and will “convene a member-only discussion” once more details emerge.
