U.S. Department of Energy Releases Critical Materials Assessment for Public Comment

On May 30, 2023, the U.S. Department of Energy (DOE) issued for public comment its draft Critical Materials Assessment. In the draft assessment, DOE characterized 22 different materials as critical, near critical, or noncritical to the nation’s energy needs based on the importance of those materials to energy applications and supply risk. DOE uses its Critical Materials Assessment — which it anticipates updating every three years — to “prioritize research and development efforts to meet the nation’s energy needs while reducing reliance on materials with high supply risk.” DOE explained that inclusion of a material on the critical materials for energy list may inform critical minerals Research Development, Demonstration, and Commercial Application (RDD&CA) Program priorities and eligibility for the Inflation Reduction Act Qualifying Advanced Energy Project Section 48C tax credits.

Although DOE has a history of conducting similar assessments to inform its critical material strategies and research activities, it prepared this Critical Materials Assessment pursuant to the Energy Act of 2020. That statute requires DOE to consider whether any nonfuel mineral, element, substance, or material “(i) has a high risk of a supply chain disruption; and (ii) serves an essential function in one or more energy technologies, including technologies that produce, transmit, store, and conserve energy.” Based on this requirement, DOE developed a framework for evaluating potential critical materials that included (1) the importance of the broader technology class in which the material is used to the energy system, (2) the relative importance of the specific subtechnology or component that uses that material to the technology class, and (3) the importance of the specific material. Using these criteria, DOE analyzed 37 potentially critical materials.

In the short term — through 2025 — DOE determined that six materials (cobalt, dysprosium, gallium, natural graphite, iridium, and neodymium) were critical and nine (electrical steel, fluorine, lithium, magnesium, nickel, platinum, praseodymium, silicon carbide, and uranium) were near critical. In the medium term — 2025 to 2035 — DOE determined that 12 materials (lithium, nickel, cobalt, graphite, gallium, platinum, magnesium, silicon carbide, dysprosium, iridium, neodymium, and praseodymium) were critical and six (uranium, copper, electrical steel, silicon, aluminum, and fluorine) were near critical. DOE explained that many of these materials are important to clean energy and decarbonization technologies that require a “different set of material supply chains from those powering the fossil economy.”

In addition to the 48C tax credits, there is a significant number of DOE grants and loans available to qualifying projects, and this list of critical materials likely will drive the distribution of funds through those programs.

Comments are due June 20, 2023, at 5 pm EST.

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