HR 3200119th CongressIn Committee

Critical Minerals and Manufacturing Support Act

Introduced: May 5, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

This bill, the Critical Minerals and Manufacturing Support Act, would modify the Internal Revenue Code’s advanced manufacturing credit (Section 45X) to boost and tighten incentives for U.S. production of battery components and their critical minerals. Key changes include increasing the credit for electrode active materials from 10% to 25%, expanding what counts as electrode active materials and related precursors, and adding explicit domestic-sourcing requirements. The bill also imposes new prohibitions on eligibility if critical minerals or components involve foreign entities of concern, and it establishes staged domestic-content thresholds for qualifying battery components and the minerals they contain, with the aim of strengthening U.S. supply chains for batteries and critical minerals. The amendments take effect for components produced and sold after December 31, 2025. In short, the bill seeks to spur domestic production and recycling of battery materials, ensure a growing share of inputs come from the United States or North America, and reduce exposure to foreign supply disruptions by tying tax credits to domestic origin and certain supply-chain safeguards.

Key Points

1Increase in credit for electrode active materials
2- The credit amount under Section 45X(b)(1)(J) for electrode active materials rises from 10% to 25%.
3Expanded rules for electrode active materials
4- Adds an explicit rule that production costs include raw materials, including material extraction from geological sources or waste products.
5New sourcing and domestic-content requirements
6- New subsection (e) sets
7- Applicable minerals rule: a qualifying battery component must have a minimum share of its critical minerals extracted/processed in the U.S. or in a U.S. free-trade-agreement country, or recycled in North America, with a certified percentage.
8- Applicable percentages: 70% (2026) and 80% (post-2026) for critical minerals.
9- Qualifying battery components rule: a minimum share of the value of their constituent elements produced/manufactured/assembled in North America, with 70% (2026), 80% (2027), 90% (2028), and 100% (after 2028).
10- The Secretary will issue regulations to implement these rules.
11Excluded entities (foreign-supply guardrails)
12- A qualifying battery component is ineligible if any applicable critical minerals or constituent elements were produced or processed by a foreign entity of concern, or if any input was produced/assembled by a foreign entity of concern. The term “foreign entity of concern” aligns with a definition in the Infrastructure Investment and Jobs Act.
13Expanded definition of electrode-related materials
14- The definition of electrode active materials now includes electrode active precursor materials and related materials (e.g., binders, solid-state electrolytes, certain listed chemical inputs).
15- The list of electrode active precursor materials includes cobalt sulfate, manganese sulfate, iron sulfate, lithium hydroxide, metallurgical silicon, phosphoric acid, iron phosphate, nickel-manganese-cobalt oxide, graphene, sulfur, various forms of graphite/pitch, and lithium carbonate.
16Silicon treated as an applicable critical material
17- Silicon used as an electrode material for battery anodes is explicitly treated as an applicable critical material.
18Effective date
19- The amendments apply to components produced and sold after December 31, 2025 (i.e., beginning in 2026).

Impact Areas

Primary beneficiaries/affected groups- U.S. battery component manufacturers and electrode-active-material producers.- Raw-material suppliers and mineral processors in North America, including those involved with “electrode active precursor materials.”- Companies involved in the recycling of critical minerals in North America.Secondary effects and considerations- Importers and foreign suppliers could face tighter eligibility rules or loss of credit eligibility if inputs come from or pass through foreign entities of concern.- Domestic mining, refining, and manufacturing capacity may be encouraged or accelerated to meet the new thresholds.Administrative and regulatory implications- The Treasury/IRS would be responsible for administering the credit and implementing the new rules, including eligibility certification and compliance requirements.- The Secretary of the Treasury (in consultation with other agencies as appropriate) would issue regulations to carry out the new provisions, including those mirroring existing regulatory frameworks referenced in the bill.Broader policy and market effects- Potential shifts in the electric vehicle and energy storage supply chains toward increased U.S./North American sourcing and production.- Possible cost and pricing implications for battery components as suppliers adapt to higher domestic-content requirements.- Enhanced focus on preventing reliance on input tied to foreign entities of concern, aligning with broader national-security and supply-chain resilience goals.

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