DOE Opens $500M Funding Opportunity for Battery Materials Processing, Manufacturing and Recycling

The U.S. Department of Energy (DOE) has issued a new Notice of Funding Opportunity (NOFO), DE-FOA-0003585, under the Infrastructure Investment and Jobs Act (IIJA) Section 40207 for Battery Materials Processing & Battery Manufacturing and Recycling Grant programs. This is the third solicitation under this program. The NOFO makes up to $500 million available for projects that develop domestic facilities for battery materials processing, manufacturing and recycling. All topic areas require a minimum 50 percent cost share, and full applications are due April 24, 2026, at 5 p.m. ET.

The program is designed to bolster domestic supply chains and increase production of critical minerals used in batteries and other applications, with an objective of increasing critical mineral production by up to 15 percent by 2030.

Program Objectives

DOE is seeking projects that advance at least one of the following:

• processing key critical materials from raw feedstocks, with a focus on lithium, nickel and cobalt
• recovering critical materials from end-of-life batteries and manufacturing scrap, prioritizing black mass production and recovery of graphite, nickel and cobalt, as well as rare earth materials where included in the recycled battery chemistry
• manufacturing components for advanced batteries, with particular emphasis on synthetic graphite, cathode active materials and specialty metals such as copper, aluminum and lithium

Key Dates and Deadlines

Topic Areas and Funding Overview

Topic Area 1: Domestic Critical Materials Processing from Raw Feedstocks

Subtopics:

• Topic Area 1a: Demonstration-Scale Projects
• Topic Area 1b: Commercial-Scale Projects

Funding and Scale

Key Details

• Eligible feedstocks include domestic or international primary and secondary ores, clays, tailings and brines (including geothermal and oilfield brines).
• Eligible products include mineral concentrates, hydroxides, sulfates and other relevant forms suitable for advanced battery applications.
• Facilities may produce non-battery materials, but the funded project scope must focus on battery materials.
• DOE's Manufacturing Deployment Office (MDO) is targeting a reduction in import reliance of approximately six to 10 percent, depending on the mineral.
• Highest priority will be given to projects that produce lithium, nickel and cobalt, along with projects that coproduce multiple critical minerals and/or materials.
• Awards for new commercial-scale projects will be at least $100 million, and awards for expansions, upgrades or retrofits of existing facilities will be at least $50 million.

Topic Area 2: Domestic Critical Materials Recycling

Funding and Scale

Key Details

• This topic area is focused on constructing facilities that build U.S. recycling capacity for battery materials sourced from manufacturing scrap and/or off-specification or end-of-life batteries.
• DOE is targeting up to a 15 percent reduction in import reliance, depending on the mineral.
• Facilities are not required to be dedicated exclusively to battery materials, but funds cannot be used for out-of-scope materials.
• Recycled feedstocks may be domestic or international and can include end-of-life, off-specification, recalled and/or rejected batteries and battery manufacturing scrap.
• Eligible products include black mass, mixed hydroxide precipitates, battery-grade sulfates and other relevant forms for advanced battery sectors.
• DOE will prioritize projects that maximize value-chain impact by coproducing multiple critical minerals and/or materials and that address key U.S. supply chain vulnerabilities, including graphite, nickel, cobalt and rare earth elements where present in the battery chemistry.
• Applicants should focus on demonstration projects (minimum award $50 million) or new commercial deployments (minimum award $100 million) of innovative and/or advanced manufacturing processes for critical minerals used in the battery sector.

Topic Area 3: Domestic Battery Materials and Component Manufacturing

Funding and Scale

Key Details

• The objective is to construct new commercial-scale facilities or retrofit, retool or expand existing commercial-scale facilities to build domestic manufacturing capacity for strategic battery components and technologies, including cells for both grid and specialized (e.g., defense) applications.
• Eligible projects include demonstration-scale facilities, new commercial facilities or upgrades/retrofitting of existing facilities for battery materials production.
• DOE's highest priorities include projects that address vulnerabilities in U.S. battery supply chains through development of synthetic graphite, cathode active materials and specialty metals manufacturing (i.e., copper, aluminum, lithium).
• Awards for new commercial-scale facilities will be at least $100 million, and awards for expansions, upgrades or retrofits will be at least $50 million.

Cross-Cutting High-Priority Characteristics (All Topic Areas)

Across all three topic areas, DOE will prioritize projects that:

• demonstrate market traction, including secured feedstock supply and offtake agreements with credible counterparties
• can compete under current market conditions
• incorporate process innovations to lower production costs and/or improve yields

Equity Considerations for Negotiation

DOE may seek to negotiate equity interests or warrants in recipient entities now or in the future. Entities may indicate in their applications whether they are open to offering equity interests or other derivatives. Any such equity considerations would be addressed during award negotiations and will not be a factor in the merit review or selection process.

Registration and Submission Requirements

Applicants must complete several registrations prior to submission:

• SAM.gov. Maintain an active registration, obtain a Unique Entity Identifier (UEI), include the UEI in the application and keep SAM.gov registration current. DOE cannot issue an award until these requirements are met.
• eXCHANGE. Register in DOE's eXCHANGE system. Each submission should use a single organizational account, with designated backup contacts.
• Grants.gov. Register (requires Login.gov) to receive NOFO updates and follow all application-related instructions posted there.

Next Steps for Interested Applicants

Given the scale of the awards, the minimum 50 percent cost-share requirement and DOE's emphasis on market-readiness, innovative projects that materially reduce import dependence, prospective applicants should move quickly to:

• confirm eligibility and fit with one or more topic areas
• secure or firm up feedstock and offtake arrangements
• develop robust technical and commercial narratives

Holland and Knight's Energy Technology Team is prepared to assist with evaluating eligibility, structuring projects to align with DOE priorities, and drafting and submitting competitive applications to this NOFO. Interested applicants with potential projects should contact the authors to discuss opportunity fit, timeline and next steps.