The US Bureau of Industry and Security will require sellers of covered battery black mass and tungsten waste and scrap to allocate 100% of their monthly sales to US persons from 27 August, using Defense Production Act powers to retain strategic recycled materials within domestic supply chains. The directive runs for one year unless it is amended or extended.
The temporary final rule operates through the Defense Priorities and Allocations System rather than a conventional import tariff or general prohibition written into customs law. Covered US persons must meet the 100% domestic sales requirement unless BIS grants an adjustment or exception, with the order scheduled to remain effective until 27 August 2027.
Black mass is defined for the rule as shredded lithium-ion battery scrap containing cathode material, anode material, or other residual battery-cell materials. The cathode fraction can include lithium, cobalt, nickel, manganese, aluminium, copper, and iron, while the anode material can include graphite or silicon.
The definition is narrower than the customs headings alone. Certain categories of electrical and electronic waste are subject to the allocation order only when the material meets BIS’s definition of black mass, meaning the rule does not automatically capture every item of battery or electrical scrap classified under the listed Schedule B codes.
Tungsten waste and scrap is separately covered under Schedule B code 8101.97.00.00. Tungsten’s combination of hardness, density, wear resistance, and high-temperature performance gives it applications across cutting tools, specialist alloys, industrial wear components, aerospace, electronics, and defence.
Both material streams are valuable because recycling can recover resources that would otherwise have to be obtained from primary mining or imported supply chains. Black mass can feed processes recovering lithium, nickel, cobalt, copper, and other battery materials, while tungsten scrap can be returned to specialist powder, carbide, and alloy production.
The rule therefore treats selected waste streams as strategic industrial feedstock rather than material that can automatically be sold to the highest global bidder. BIS says the measure is intended to secure an adequate domestic supply of recoverable critical minerals and materials considered essential to national defence.
That does not mean every covered shipment is permanently trapped in the United States. BIS may issue company-specific or generally applicable adjustments and exceptions, and it can provide interim relief while a request is being considered. Grounds can include exceptional hardship, outcomes contrary to the purpose of the Defense Production Act, irreparable harm, or the need for additional compliance time.
The rule also anticipates a particularly relevant industrial case: material may need to leave the United States because suitable processing capacity is located elsewhere. BIS can consider relief where black mass or tungsten scrap is sold overseas for processing or refining and the processed material is subsequently returned to the United States.
That provision exposes the difference between retaining scrap and possessing the industrial capacity to refine it. Keeping more battery material inside the country increases potential feedstock for domestic recyclers, but it does not automatically add hydrometallurgical plants, separation equipment, tungsten-processing capacity, trained workers, or customers capable of absorbing the recovered products.
If domestic processing cannot expand quickly enough, an absolute retention policy could leave sellers with material that has fewer practical outlets. The adjustment process gives BIS a mechanism to address those cases, although businesses will still have to demonstrate why relief is justified rather than continuing established export arrangements automatically.
For recyclers and scrap suppliers, the immediate task is contractual. Companies will have to identify whether their material falls within the defined black-mass categories, review overseas sales arrangements, establish whether customers qualify as US persons, and decide whether existing processing routes require an application for adjustment or exception.
The rule also creates a distinction between a DPAS authorization and other export permissions. BIS explicitly states that an adjustment or exception under the allocation order does not replace any licence or authorization that may separately be required under US export-control regulations. Permission to depart from the domestic sales requirement is therefore not necessarily permission to complete the export itself.
BIS intends to respond to adjustment and exception requests within 14 days where possible, and applications can be submitted on a rolling basis. The underlying domestic sales requirement, however, begins on 27 August, giving affected sellers only a short period between publication and implementation.
The industrial significance reaches beyond the relatively specialised scrap codes involved. Critical-material policy is moving further downstream, from mines and refining projects into recycling yards and recovered feedstock. A drum, pallet, or bulk shipment of industrial waste may still look like scrap, but the US government increasingly sees the metals inside it as supply-chain capacity worth keeping.
