The U.S. Department of Energy (DOE), through its Office of Manufacturing and Energy Supply Chains (MESC), is offering a significant funding opportunity under the Infrastructure Investment and Jobs Act (IIJA) to establish a Rare Earth Elements (REE) Demonstration Facility. This initiative, backed by up to $134 million in federal funding, is a critical step toward strengthening the domestic supply chain for REEs, which are essential components in clean energy technologies, defense systems, and advanced electronics. These elements are predominantly imported, with heavy REEs like terbium and dysprosium currently sourced entirely from foreign suppliers. By investing in domestic processing capabilities, DOE aims to reduce dependence on international markets, enhance national security, and bolster energy resilience.
The program seeks to fund 1–2 projects that will design, construct, and operate an innovative, full-scale REE separation and refining facility. The plant must process feedstock such as acid mine drainage, mine waste, or other deleterious materials, including e-waste, and produce 150 to 1,000 metric tons per year of REEs. The facility must perform the entire sequence—from feedstock intake to the production of refined rare earth metals—at a single site. Preference is given to proposals prioritizing heavy rare earth elements and scalable, modular processing solutions that support long-term commercial viability.
Applicants must meet stringent eligibility criteria. Projects must involve a domestic academic partner either as a lead or significant subrecipient. Proposals can come from academic institutions, consortia including academic members, or other domestic entities with academic partnerships. In addition, the project must be executed entirely in the U.S., and a minimum 50% cost share is required. Foreign entities may only participate with an approved waiver, and all work must comply with DOE’s performance and data protection requirements.
The application process includes a non-mandatory letter of intent due by December 10, 2025, followed by a full application submission by January 5, 2026. The anticipated selection and award dates are January and March 2026, respectively, with a project performance period extending through 2029. Applications must be submitted via the Infrastructure Exchange platform. Proposals will be evaluated based on compliance, technical merit, cost-effectiveness, scalability, environmental impact, and potential for commercialization. DOE will oversee each project with significant involvement at all stages, including Go/No-Go decision points for phase transitions.
This funding opportunity aligns with national objectives to secure critical mineral supply chains and stimulate domestic innovation. Applicants are expected to present comprehensive designs, engineering plans, and partnership agreements, along with environmental and permitting strategies. All submissions must adhere to DOE’s requirements for format, documentation, and regulatory compliance. For inquiries, applicants may contact DOE at DE-FOA-0003587@netl.doe.gov.
Ensure permitting and NEPA strategy is well-developed; prioritize heavy REEs; clearly show cost share commitments and off-take agreements; demonstrate market readiness and detailed engineering plans.
