DOE Announces 4 New Critical Minerals Funding Opportunities

Highlights

• The U.S. Department of Energy (DOE) launched four new funding initiatives totaling nearly $1 billion to expand domestic critical minerals production, processing, recycling and supply chain resilience, with heightened restrictions on foreign entities of concern (FEOCs).
• Programs span awards of $50 million to $500 million across battery materials, byproduct recovery, rare earth elements and technology acceleration, focusing on late-stage, market-ready projects aligned with the Trump Administration's energy dominance agenda.
• Applicants should begin preparing now by completing registrations, assessing FEOC exposure, forming academic and industry partnerships, and defining commercialization pathways to align with DOE priorities. Holland & Knight has extensive experience guiding clients through prior funding rounds and can help position projects to compete effectively in this cycle.

The U.S. Department of Energy (DOE) on Aug. 13, 2025, unveiled four major funding initiatives aimed at accelerating the domestic production, processing and recycling of critical minerals and materials. Collectively, these planned Notices of Funding Opportunity (NOFOs) represent nearly $1 billion in potential federal investment to fortify U.S. supply chains, advance energy dominance and reduce reliance on foreign entities of concern (FEOCs).

At the center of the announcements is the $500 million Battery Materials Processing and Battery Manufacturing and Recycling Grant Program – the third competitive funding round under Section 40207 of the Infrastructure Investment and Jobs Act (IIJA) and first Section 40207 solicitation to be issued under the Trump Administration's DOE. Flanking this opportunity are three additional notices of intent (NOIs) that address other critical supply chain gaps, from rare earth element demonstration to byproduct recovery and mid-stage technology acceleration.

1. Battery Materials Processing and Battery Manufacturing and Recycling NOI

• Agency: DOE Office of Manufacturing and Energy Supply Chains (MESC)
• Anticipated Funding: up to $500 million
• Award Size: $50 million to $200 million
• Performance Period: 24 to 48 months
• Cost Share: to be specified in the NOFO; previous rounds required at least 50 percent nonfederal cost share for for-profit applicants

This flagship program will support demonstration- and commercial-scale projects that process, recycle or manufacture critical minerals and materials, including lithium, graphite, nickel, copper, aluminum and rare earth elements. Applicants must identify domestic downstream customers and will receive priority if they commit to 1) avoiding material sourced from FEOCs and 2) not exporting recovered materials to FEOCs. DOE's May 2024 interpretive rule defines FEOCs and will be a central compliance consideration.

How This Round Compares to Previous Funding Rounds

DOE has held two prior competitive funding rounds under Section 40207:

• Round 1 (2022). $1.82 billion to 14 projects to build and expand commercial-scale facilities for battery materials extraction, processing, component manufacturing and recycling
• Round 2 (2023-2024). More than $3 billion to 25 projects in 14 states to retrofit, expand and build new facilities for battery-grade processed critical minerals, component manufacturing, battery manufacturing and recycling

The third round maintains the focus on commercial-scale, near-term deployment but narrows in on critical minerals processing and derivative manufacturing with heightened FEOC restrictions and explicit alignment to the Trump Administration's energy dominance agenda. With fewer total dollars available than in prior rounds and awards ranging from $50 million to $200 million, the NOI suggests DOE is looking to back a smaller portfolio of late-stage, market-ready projects capable of advancing administration priorities quickly and visibly.

2. Critical Minerals and Materials Accelerator (NOI)

• Agency: DOE Advanced Materials and Manufacturing Technologies Office (AMMTO)
• Anticipated Funding: up to $50 million
• Performance Period: one to four years

This program will foster industry-led partnerships to prototype and pilot processing technologies currently proven only at the bench scale. Focus areas include:

• rare earth magnet supply chain processes, including from secondary sources
• refining/alloying gallium, gallium nitride, germanium and silicon carbide for semiconductor use
• cost-competitive direct lithium extraction and separation
• co-production technologies to recover critical materials from byproducts and scrap

Selected projects will advance toward domestic commercialization within three to seven years, leveraging DOE investments such as the Critical Materials Innovation Hub and the Minerals to Materials Supply Chain Research Facility (METALLIC). A Teaming Partner List will be available to help applicants form consortia.

3. Mines and Metals Capacity Expansion – Piloting Byproduct Recovery (NOI)

• Agency: DOE Office of Fossil Energy and Carbon Management (FECM)
• Anticipated Funding: ~$250 million total
• Cost Share: 20 percent to 50 percent
• Technical Readiness: TRL 5-6 to TRL 7

This program targets pilot-scale facilities that recover valuable critical minerals and materials from existing industrial processes. Topic areas include:

• coal-based industry pilots ($75 million total; maximum three awards)
• all-industry pilots ($175 million total; maximum seven awards)

Eligible feedstocks include coal waste, mine tailings, industrial byproducts and specialty metal process streams. Target products include cobalt, nickel, magnesium, manganese, gallium, germanium, lithium and rare earth elements. Applicants must present a commercialization plan for 2028 to 2030.

4. Rare Earth Elements Demonstration Facility (NOI)

• Agency: DOE MESC
• Anticipated Funding: up to $135 million
• Cost Share: at least 50 percent
• Other Requirements: academic partner required

This initiative will fund the design, construction and operation of a demonstration-scale facility to extract, separate and refine rare earth elements from unconventional feedstocks such as acid mine drainage, mine waste, e-waste or deleterious materials. The goal is to establish the commercial viability of U.S.-based rare earth element production while reducing dependence on foreign sources.

5. ARPA-E RECOVER Program (Award Selections Forthcoming)

Though not a NOFO, DOE's Advanced Research Projects Agency-Energy (ARPA-E) will soon announce awardees under its $40 million Realize Energy-rich Compound Opportunities Valorizing Extraction from Refuse waters (RECOVER) program. RECOVER aims to develop energy-efficient, scalable technologies to extract ammonia and critical metals from domestic wastewater – including streams from agriculture, mining, and oil and gas operations. The program's goal is to replace up to 50 percent of domestic ammonia supplies and 100 percent of certain key critical metals using waste-derived sources while creating new revenue opportunities for wastewater treatment facilities and reducing environmental impacts.

Holland & Knight's Experience Navigating Federal Funding for Critical Minerals

Holland & Knight has the leading DOE grant funding practice in the nation. Since 2021, the team has helped clients secure more than $5 billion in DOE grants under the IIJA and other programs – including significant wins in both previous Section 40207 funding rounds.

We have deep experience in:

• structuring competitive proposals for both demonstration- and commercial-scale projects
• navigating DOE's application and registration requirements
• advising on FEOC compliance and domestic supply chain strategies
• positing projects to align with administration priorities and evaluation criteria

What's Next?

DOE is expected to release these NOFOs in the coming months. To prepare, potential applicants should:

1. complete required registrations (Infrastructure Exchange, System for Award Management (SAM), FedConnect and Grants.gov for alerts)
2. assess supply chain exposure to FEOCs and develop mitigation strategies
3. identify partners – academic, industrial and supply chain – especially for programs with explicit teaming requirements
4. define commercialization pathways consistent with program timelines and administration priorities

Holland & Knight will continue to monitor DOE announcements and stands ready to help position projects for success in this competitive funding round. Interested applicants with potential projects should contact the authors to discuss opportunity fit, timeline and next steps.

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