New U.S. Restrictions on Export of Black Mass from Recycling Lithium-Ion Batteries Pose Major Challenges for Battery Recycling
On August 6, 2026, the Bureau of Industry and Security (BIS) within the U.S. Department of Commerce issued a “Temporary Final Rule” prohibiting exports of two materials—black mass from the initial stage of recycling lithium-ion batteries (LIBs) and tungsten waste and scrap—without a license, adjustment, or exception issued by BIS. See 91 Fed, Reg. 50,701 (August 6, 2026). BIS issued this rule under authority delegated to the Department through a Presidential Determination released on July 30 under the Defense Production Act to restrict exports of wastes containing recoverable critical minerals. See Presidential Determination No. 2026–19 (July 30, 2026), 91 Fed. Reg. 50,465 (August 4, 2026). The export prohibition—expressed as a “100% domestic sales requirement”—takes effect on August 27, 2026, and is expected to remain effective for at least one year.
Under the rule, affected persons can apply for an adjustment or exception to the prohibition, which may be company-specific or generally applicable. BIS indicates that it may grant such adjustments or exceptions in certain circumstances, such as if the domestic sales requirement results in an undue or exceptional hardship, or if the black mass will be exported for refining with the refined material being returned to the U.S. According to BIS, persons may submit requests for such adjustments and exceptions “on a rolling basis” from August 6, 2026, through August 27, 2027. BIS states that it intends to respond to these applications within 14 days of receipt. However, this timeframe is not a firm deadline for the agency. Applicants can ask for a temporary license to continue exports while their requests are pending.
Consistent with the description of the rule as a Temporary Final Rule, BIS is inviting public comments, until November 4, 2026. However, as noted above, the rule will operate in the meantime as a final rule, becoming effective on August 27, 2026.
Implications for Battery Recycling
The rule poses particular challenges for recycling of LIBs because there is very limited capacity in the U.S. to process black mass to recover critical minerals. Virtually all the world’s capacity for such refining is in Asia. Without the ability to ship black mass to the foreign refiners, there will be no way to fully recover critical minerals from LIBs for the foreseeable future. For this reason, domestic companies that collect and process LIBs to produce black mass are likely to move quickly to request adjustments or exceptions from the prohibition. The same is true for brokers currently involved in exporting black mass.
It is unclear how quickly BIS will be able to process all the requests that are likely to be submitted. With the August 27 effective date rapidly approaching, there is a potential for significant disruptions. Moreover, it is unclear how freely BIS will grant the requests. If BIS denies most requests for adjustments or exceptions, the existing and developing U.S. framework for recycling LIBs and recovery of critical minerals may be upended.
Potential Implications for LIBs, Rare-Earth Magnets, and Other Materials
Although the Temporary Final Rule is limited to black mass and tungsten waste/scrap, the Presidential Determination is much broader in scope. It delegates to the Secretary of Commerce authority to restrict exports of “black mass, end-of-life, rare-earth permanent magnets or other goods that have fully completed the manufacturing process; swarf; and other waste and scrap containing critical minerals and materials.” See Presidential Determination, Section 2(a). A Fact Sheet issued by the White House together with the Determination specifically identified “finished goods like permanent magnets and lithium-ion batteries.”
While we are not currently aware of any imminent BIS plans to issue additional export restrictions for other items, the fact that LIBs and rare-earth magnets have been specifically mentioned in this context suggests that further rules may be forthcoming, especially with respect to those materials. Clearly, this warrants close monitoring.
Other Related Developments
In separate but related actions, seven bills focused on recovery of critical minerals from various wastes are currently under consideration in the U.S. House of Representatives. On June 24, 2026, B&D Principal Aaron Goldberg (Washington, DC, and Austin, Texas) testified in his personal capacity on one of the bills before the House Committee on Energy and Commerce, Subcommittee on Environment. The Subcommittee approved that bill, H.R. 9615, entitled the Battery Recycling for America’s Competitive Economy (BRACE) Act, on a bipartisan basis on July 14, 2026, and advanced it to the full Committee. Committee markup of the bill is expected in September, after Congress returns from its summer recess. The full Committee already marked up two other of the critical mineral recycling bills and they are ready for consideration on the House floor, namely: (1) the Environmental Monitoring and Remediation Technology Assessment Initiative (EMRTAI) Authorization Act (H.R. 9616), and (2) the Coordinating and Harnessing America’s Recovery of Minerals (CHARM) Act (H.R. 9617).
The U.S. Environmental Protection Agency (EPA) is also expected to soon issue a proposed rule under the Resource Conservation and Recovery Act to (a) modify the existing “universal waste” requirements for lithium batteries and (b) expand the universal waste rule to cover waste photovoltaic (PV) solar panels. The latest federal Regulatory Agenda indicates that EPA will issue the proposed rule in August 2026. However, it does not appear that EPA has submitted the proposal to the Office of Management and Budget for review. Thus, the proposal may not be issued until the fall or winter.
These U.S. actions take place against the backdrop of negotiations under the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (Basel Convention) that could add further complexity and disruption to the international movement of black mass and lithium batteries for recycling. Parties to the Convention (190 countries and the EU) are considering proposals to add lithium, cobalt, and nickel (and their compounds) to Annex I of the Convention. If adopted, wastes containing these materials would be classified as presumptively hazardous worldwide, unless exporters could demonstrate the absence of hazardous characteristics. Hazardous wastes are subject to stringent prior informed consent approvals from importing, exporting and transit states, as well as contract, movement document, and financial assurance requirements. In many instances, international shipments of Basel wastes are prohibited. For example, parties are prohibited from trading in Basel-covered wastes with the U.S. (a non-party) absent a separate agreement under Article 11 of the Convention. Negotiations on possible revisions to Annex I resume in an Expert Working Group that will meet from September 27-29, 2026, in Geneva. Separate negotiations are underway focused on clarifying the classification and management of e-waste and waste batteries. A prior B&D news alert, “China and Europe Diverge on Classification of Black Mass from Recycling of Lithium-Ion Batteries,” discusses varying approaches that different countries have started to take on classification of LIBs and black mass.
For more information about these battery and critical mineral developments, and their potential implications, please contact Aaron or Paul. They and other B&D attorneys have extensive experience with a full range of environmental and related regulatory issues associated with recycling of batteries and other products containing critical minerals, including requirements for management of hazardous wastes, transboundary movement of such wastes, transport of dangerous goods, extended producer responsibility, toxic substances control, and hazard communication. Our work includes representing industry groups in negotiations under the Basel Convention and at the Organization for Economic Cooperation and Development on issues related to the classification and control of wastes managed for recovery. The firm has hosted a series of webinars addressing these and other issues in the specific context of batteries. We advise companies across the entire battery supply chain, including miners/processors of battery materials, manufacturers of batteries and battery-containing products (e.g., consumer electronics and electric vehicles), distributors/retailers, logistics providers, large-scale users, companies engaged in “second-life” battery use, collectors/recyclers of end-of-life batteries, black mass brokers, and developers of innovative battery technologies.
