How recycled material fits sourcing requirements
Guidance on the critical-mineral requirement treated minerals recycled in North America as meeting the location test, because the recycling step counts as the relevant processing. That made domestic recycling a route to qualifying content even when the original minerals were mined elsewhere.
Foreign entity of concern rules add a second test that looks at who controls or owns the supply chain. Recycled material must therefore be traceable not only to a location but also to eligible entities, which requires careful documentation of feed sources and processing partners.
| Concept | What it covers |
|---|---|
| Critical mineral requirement | Where minerals were extracted, processed or recycled |
| Battery component requirement | Where battery components were manufactured or assembled |
| Foreign entity of concern rules | Ownership and control of the supply chain |
| Section 45X | Domestic production of eligible components and minerals |
Building evidence that holds up
Credit claims and customer audits rely on traceability. For recycled material that means records linking each batch of product to its feed, the processing site and the entities involved. Mass-balance accounting is commonly used where feed streams are blended, and it must be applied consistently.
Tax positions depend on detailed facts, so documentation should be designed with advisers. A recycler's role is to provide complete, consistent records: intake manifests, assay results, processing logs and certificates of analysis for each output batch.
- Batch-level certificates of analysis
- Feed source and ownership records
- Mass-balance statements for blended feed
- Processing site and date records
Field note