The Biden administration may intervene in the critical minerals market to support prices after an influx of cheap Chinese imports of metals such as lithium.

A US Department of Energy (DOE) official familiar with the matter told Politico that a price floor will be established and that when market prices of critical minerals fall below that level for minerals produced from certain US projects, the department will pay the difference.

The US is looking to reduce its reliance on China for critical minerals as the nation currently holds a market-controlling position in global supply chains. To support energy security and accelerate the energy transition, the Biden administration has looked to encourage domestic production of the minerals needed for clean energy technologies and electric vehicles.

However, many US mineral processing projects have been delayed or cancelled, despite the promise of a collective $1bn in grants from the federal government. The department hopes the price floor measures will help overcome such issues.

“If we move forward on anything like this, the intent would be to give the nudge that is needed to set off the flywheel, versus create a permanent subsidy or cushion for a particular sector or company going forward,” the DOE official reportedly told Politico.

The official works in the DOE’s Manufacturing and Energy Supply Chains Office. They said that so far most of the work done by the office had looked at investing in the construction side of critical minerals, “but it feels warranted, given what we are hearing from the market, to think through, are there more creative ways where we can support projects so that they can… have the financial certainty to actually scale up?”

Nevertheless, there are questions over whether the fund will be possible without explicit authorisation from Congress, considering that federal agencies’ ability to intervene was curtailed drastically earlier this year when the Supreme Court overturned a judicial doctrine that enabled decades of intervention.