DPAS Directive Allocation Order and Additional Requirements for Recoverable Critical Minerals and Materials

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR 700

DPAS Directive Allocation Order and Additional Requirements for Recoverable Critical Minerals and Materials

Bureau of Industry and Security, Department of Commerce.

Temporary final rule; Request for comments.

The Bureau of Industry and Security ("BIS") is publishing this temporary final rule to restrict the exportation of black mass and tungsten waste and scrap without a license. Specifically, as of August 27, 2026, 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. This action is taken pursuant to section 101 of the Defense Production Act of 1950, as amended ("DPA" or the "Act"), the Defense Priorities and Allocations System (15 CFR part 700) and Presidential Determination Pursuant to Section 101 of the Defense Production Act of 1950, as Amended, on Recoverable Critical Minerals and Materials, dated July 30, 2026 ("DPA Determination on Recoverable CMMs"), in which the President authorized the Department of Commerce ("Commerce") to address the scarcity of recoverable critical minerals and materials ("CMMs"). BIS invites the public to submit comments on whether any additional sales requirements are necessary or appropriate to promote the national defense.

Directive Allocation Order Effective date: August 27, 2026 through August 27, 2027. Request for Adjustment and Exceptions date: Requests may be submitted on a rolling basis beginning August 6, 2026 through August 27, 2027. Comments: Comments must be received by November 4, 2026.

Requests for an adjustment or exception may be submitted to the Department of Commerce, Bureau of Industry and Security, Office of Strategic Industries and Economic Security via [email protected]. Comments regarding this temporary final rule may be submitted to the Federal rulemaking portal at: https://www.regulations.gov. The regulations.gov ID for this notice is BIS-2026-0364. Please refer to RIN 0694-AK51 in all comments. All filers using the portal should use the name of the person or entity submitting the comments as the name of their files, in accordance with the instructions below. Anyone submitting business confidential information should clearly identify the business confidential portion at the time of submission, file a statement justifying nondisclosure and referring to the specific legal authority claimed, and provide a non-confidential version of the submission. For comments submitted electronically containing business confidential information, the file name of the business confidential version should begin with the characters "BC." Any page containing business confidential information must be clearly marked "BUSINESS CONFIDENTIAL" on the top of that page. The corresponding non- confidential version of those comments must be clearly marked "PUBLIC." The file name of the non-confidential version should begin with the character "P." Any submissions with file names that do not begin with either a "BC" or a "P" will be assumed to be public and will be made publicly available at: https://www.regulations.gov. Commenters submitting business confidential information are encouraged to scan a hard copy of the non-confidential version to create an image of the file, rather than submitting a digital copy with redactions applied, to avoid inadvertent redaction errors which could enable the public to read business confidential information.

Emily Noel, Office of Strategic Industries and Economic Security, Bureau of Industry and Security, Department of Commerce, Telephone: 202-482-3634; email: [email protected].

The preamble to this temporary final rule consists of four sections:

I. Legal Authorities II. Provisions of the Temporary Final Rule III. Request for Comment IV. Rulemaking Requirements

BIS administers the DPAS regulation which implements the priorities and allocations authority under Title I of the DPA (50 U.S.C. 4501, et seq.), with respect to all materials, services, and facilities, including construction materials, not delegated to other

Secretaries under Executive Order ("E.O.") 13603. These materials, services, and facilities are referred to as "industrial resources." On July 30, 2026, the President issued DPA Determination on Recoverable CMMs. Under DPA Determination on Recoverable CMMs, the President found that certain recoverable CMMs are scarce and critical materials essential to the national defense. The President stated that the inadequate supply of CMMs poses an increasing risk to our national defense and security, and it is imperative that the United States take immediate action to secure the supply of recoverable CMMs. Accordingly, pursuant to section 101 of the DPA, the President found that recoverable CMMs meet the criteria specified in section 101(b) of the DPA (50 U.S.C. 4511(b)). With these findings, the President authorized the Secretary of Commerce ("Secretary") to use the Secretary's delegated authority under E.O. 13603 of March 12, 2012 (National Defense Resources Preparedness) to implement this determination by taking all appropriate action under section 101 of the DPA.

BIS has determined that sales by U.S. persons of certain scarce materials identified in DPA Determination on Recoverable CMMs shall be allocated to U.S. persons through an Allocation Order, which are described in pursuant to Subpart F of Part 700 (DPAS). Consistent with section 709(b)(2) of the DPA (50 U.S.C. 4559(b)(2)), this Allocation Order and associated necessary conforming revisions to the DPAS regulations are published as a temporary final rule because BIS has determined that urgent and compelling circumstances make compliance with prior notice and opportunity for public comment impracticable. This temporary rule is necessary to immediately secure the supply of certain recoverable CMMs to ensure an adequate supply of these materials deemed essential to the national defense, as required by the President under DPA Determination on Recoverable CMMs. Specifically, BIS is publishing this temporary final rule to implement a Directive Allocation Order, as described in Sec. 700.33 (Types of allocation orders) in the DPAS. The industrial resources specified in the Directive Allocation Order may not be exported from the United States without explicit authorization by BIS. This Directive Allocation Order and the associated regulatory revisions in this temporary final rule expire one year from its effective date, unless adjusted or extended by BIS prior to the expiration date in a Federal Register publication.

BIS is revising Sec. 700.34 of the DPAS to add new paragraph (d), to include a provision to issue allocation orders through a temporary final rule in the Federal Register. In addition, BIS is adding new supplement no. 1 to part 700 to issue a Directive Allocation Order pursuant to new paragraph Sec. 700.34(d). The new supplement includes: Information regarding scope and definition of terms that apply solely to the Directive Allocation Order issued by publication of this temporary final rule (and not to other provisions within the DPAS); Adjustment and exceptions requirements for this Directive Allocation Order issued by a temporary final rule; Additional compliance guidance; and A table that identifies the scarce and critical materials deemed essential to national defense under DPA Determination on Recoverable CMMs, identified by 10-digit Schedule B codes and accompanying description. The table includes the monthly domestic sales requirement percentage, as well as effective date and expiration date of this Directive Allocation Order. The provisions in the supplement apply solely to the Directive Allocation Order and do not apply to other official actions taken pursuant to the DPAS. Additionally, BIS is making conforming changes to Sec. Sec. 700.8 (Definitions) and 700.80 (Adjustments or exceptions) to include reference to supplement no. 1 to part 700 and the specific provisions that are exclusively required for allocation orders issued through a temporary final rule in the Federal Register in new supplement no. 1 to part 700.

B. Directive Allocation Order Requirements for Black Mass and Tungsten Waste and Scrap

U.S. persons engaged in the sale of materials described and identified by Schedule B codes listed in Table 1 of this supplement are required to comply with this order, in accordance with the provisions of the Defense Priorities and Allocations System regulation (15 CFR part 700). As of August 27, 2026, 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, as specified in new supplement no. 1 to part 700 of the DPAS. For purposes of this Directive Allocation Order, "black mass" means any shredded lithium-ion battery scrap that contains cathode material (which may include lithium, cobalt, nickel and manganese), anode material (graphite, silicon) or other residual battery cell materials. Accordingly, starting August 27, 2026, U.S. persons engaged in the sale of black mass (Schedule B codes 8549.13.00.00, 8549.14.00.00, and 8549.19.00.00) and tungsten waste and scrap (Schedule B code 8101.97.00.00) must allocate 100 percent of monthly sales to U.S. persons (referred to as a "domestic sales requirement"), unless an exception or adjustment is granted by BIS, as described in Section II.C of this temporary final rule. The domestic sales requirement for electrical and electronic waste and scrap: waste and scrap of primary cells, primary batteries and electric accumulators; spent primary cells, spent primary batteries and spent electric accumulators: sorted by chemical type and not containing lead, cadmium or mercury (Schedule B code 8549.13.00.00); electrical and electronic waste and scrap: waste and scrap of primary cells, primary batteries and electric accumulators; spent primary cells, spent primary batteries and spent electric accumulators: unsorted and not containing lead, cadmium or mercury (Schedule B code 8549.14.00.00); and electrical and electronic waste and scrap: waste and scrap of primary cells, primary batteries and electric accumulators; spent primary cells, spent primary batteries and spent electric accumulators: other (Schedule B code 8549.19.00.00) are limited to materials that meet the definition of "black mass", as defined in supplement no. 1 to part 700. Materials under these Schedule B codes that do not meet this definition of "black mass" are not subject to this Directive Allocation Order. Therefore, starting August 27, 2026, "black mass" (Schedule B codes 8549.13.00.00, 8549.14.00.00, and 8549.19.00.00) and tungsten waste and scrap (Schedule B code 8101.97.00.00) must remain physically located within the United States, unless otherwise authorized by BIS. U.S. persons must continue to fill DPAS rated orders for covered black mass and tungsten waste and scrap from U.S. persons in accordance with the DPAS regulations. In accordance with new Supplement no. 1 to part 700(c), implemented through this temporary final rule, BIS may grant exceptions or adjustments on a case-by-case basis to allow sales to non-U.S. persons, notwithstanding the domestic sales requirement.

While Subpart K of the DPAS describes the Adjustments, Exceptions and Appeals process, U.S. persons who are subject to the domestic sales requirement for "black mass" and tungsten waste and scrap must submit a request for an adjustment or exception, following the process described in new supplement no. 1 to part 700(c). BIS may authorize both company-specific and generally applicable adjustments or exceptions from the sale requirement at its discretion, consistent with the determination that the restrictions covered by this rule are necessary or appropriate to promote the national defense. In addition, BIS may authorize interim relief--i.e., a DPAS temporary license--while a request is pending. A DPAS temporary license or other type of approval which provides authorization from BIS for an adjustment or exception to this Directive Allocation Order is neither equivalent to nor replaces licenses or other authorizations to export, reexport, or transfer (in-country) commodities, technology, or software pursuant to the Export Administration Regulations (15 CFR parts 730-774). Persons granted a DPAS license or DPAS temporary license under the Directive Allocation Order must otherwise adhere to U.S. export control regulations. BIS will consider granting adjustments, exceptions, or interim relief for this Directive Allocation Order for the following scenarios, among others: The domestic sales requirement results in an undue or exceptional hardship on that person not suffered generally by others in similar situations and circumstances. The consequence of complying with the domestic sales requirement is contrary to the intent of the DPA or this part--for example, because it would reduce the domestic supply of CMMs. A U.S. person plans to sell black mass and tungsten waste and scrap to a person located outside the United States for processing or refining, and then the processed/refined material will be returned to the United States. Compliance with the domestic sales requirement will result in irreparable harm to a U.S. person who is subject to the order. Additional time is needed to comply with the domestic sales requirements. Requests for adjustments and exceptions must be made in writing and provided to BIS via [email protected]. Each request for adjustment or exception must 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; and relevant supporting documents or data to support the request. The submission of a request for adjustment or exception shall not relieve any person from the obligation of complying with the domestic sales requirement while the request is being considered, unless such interim relief is granted in writing. BIS intends to respond to requests for adjustment of or exceptions to compliance with the domestic sales requirement within 14 days of the date of receipt. An appeal for a decision under this section may be made in accordance with 15 CFR 700.81. For more information regarding adjustments and exception requests, please refer to 15 CFR 700.80.