Witnesses told members of Congress that strict policies on critical minerals contribute to issues across the supply chain during a House environmental subcommittee hearing on Wednesday.
Josh Gubkin, associate general counsel at Redwood Materials, said that two laws that the Environmental Protection Agency oversees are “at the center of this problem:” the Toxic Substances Control Act and the Resource Conservation and Recovery Act.
TSCA authorizes the agency to review and oversee chemical regulations, while RCRA authorizes the agency to oversee hazardous waste “from the cradle to the grave,” according to EPA’s website.
Gubkin added that both statutes need to be “modernized to reflect current technology and market realities.”
EPA’s regulatory roadblocks
Many manufacturers, particularly in the chemical industry, have reported delays in the EPA’s new substances review process under TSCA’s safety amendment, which they say have exceeded the allotted 90 days and affected their businesses. Moreover, chemical stakeholders said the EPA’s guidelines are inconsistent and that the risks are not science-based.
Battery recycler Redwood Materials processes cathode materials, which Gubkin said the EPA treats as a new substance if modified and can take over a year to process. He added that TSCA “punishes recyclers” by restricting domestic distribution of new variants of battery materials that the company recovers from end-of-life power sources, leading to the export of critical minerals.
Another regulatory roadblock Redwood encountered was the EPA’s 2023 RCRA memo that classified lithium-ion batteries as hazardous waste or “universal waste.” The classification, he said, forces domestic recyclers into a yearslong permitting process that could be a “death knell for innovation,” or requires the company to store batteries at a separate location from Redwood’s processing plant.
“This creates more risk, not less,” Gubkin said. “China reclassified the same materials as non-waste raw material last year, and now controls more than 80% of global lithium-ion recycling capacity.”
Gubkin also pointed to the European Commission’s regulation, which classified black mass, or shredded battery waste, as hazardous, adding that the U.S. was “on track to make the same mistake.”
Conflicting interagency policies
Furthermore, Gubkin said that TSCA’s regulations differ from the Occupational Safety and Health Administration’s policies and that TSCA requirements don’t provide additional protection for workers. Instead, it adds costs and problems for the recycler, he said.
“Why aren't these aligned?” Gubkin said. “And moreover, why isn't OSHA, who has the ability and the mandate to go and find these levels of protection, have them do the work on that, so that we have a consistent framework from state to state across the nation?”
Chris Lehman, chief development officer at metals and materials processor Principal Mineral, said in his remarks that regulatory processes are “often fragmented” across the federal agencies, leading to unpredictable timelines and various outcomes.
“When regulatory pathways are clear and consistently applied, investors are willing to commit long-duration capital,” Lehman said. “When they are not, projects are delayed or do not move forward at all.”
Beia Spiller, a fellow and the transportation program director at the environmental think tank nonprofit Resources for the Future, argued that weakening environmental safeguards won’t solve the domestic critical mineral supply chain issue.
She pointed out that extracting and processing minerals in the U.S. is more expensive than in other regions because inputs such as labor, electricity and construction materials are more expensive. While regulations can raise costs, they’re not the primary cost driver, Spiller said.
Spiller also argued that eliminating community engagement to speed up timelines is not a shortcut but could instead increase the likelihood of litigation after permits are issued.
Spiller also said that the lack of labor and expertise, as well as staffing shortages at federal agencies, reduces the government’s ability to oversee the regulatory process.
“But beyond that, environmental safeguards are part of the competitive advantage of producing here, and they help ensure that the supply chain is sustainable and socially legitimate,” Spiller said. “Well-designed environmental rules can encourage innovation, including process improvements that can reduce emissions and sometimes even reduce costs.”
Spiller added that strong standards could support workforce recruitment and retention, as people are “more likely to live and work where air and water are clean and safety risks are managed.”
“Healthier environments mean a healthier workforce, reducing illness and absenteeism and increasing company productivity,” Spiller said. “But for these laws to support rather than hinder the development of the supply chain, we need strong governance, and that means a well-staffed and well-funded public workforce that can implement.”
