The current planned capacity for lithium processing in the U.S. is on track to meet demand from domestic battery factories. This is great for onshoring the battery supply chain and is proof that supportive industrial policies work! The key policies enabling this are the Battery Materials Processing Grants, the 30D New Clean Vehicle Tax Credit, and the 45X Advanced Manufacturing Production Tax Credit. However, current planned capacity for nickel, cobalt, and graphite still fall well short of future demand, so there’s a lot more work to be done.
What’s the big problem? **Price.** Global prices for battery-grade critical minerals are currently much lower than the cost it takes to produce them domestically, so project developers are having trouble finding buyers willing to pay a viable price.
What should DOE do? Well, it can accelerate project development by providing demand certainty through backstopping the offtake of processed, battery-grade critical minerals. This means that DOE would commit to ensuring that producers are able to sell a minimum volume of their materials at a minimum price floor, either through subsidizing the difference between the market price and the price floor or by outright buying the materials that producers are unable to sell. This makes it easier for project developers to find buyers and allows them to convince investors and lenders to fund their project.
[Read the full report here.](https://fas.org/publication/critical-thinking-on-critical-minerals/)
Source: scientistsorg