As co-founder and CEO of Halo Materials, Darren Hau is focused on graphite—a U.S.-designated critical mineral and one of the most vulnerable pieces of the battery supply chain. He works at the intersection of energy, materials, and manufacturing, rethinking how essential inputs are produced to make domestic supply chains more resilient and cost competitive.
In this CleanEcon Innovation Spotlight, Darren shares his perspective on why graphite has been overlooked, what it will take to build a viable domestic supply, and how new approaches to production could reshape the economy.
Graphite is a critical input for batteries, but it’s often overlooked. Why does it matter more than people realize, and why is this the right moment to rethink how it’s produced and sourced?
All the batteries we rely on for things like phones, drones, EVs, and grid storage rely on graphite. When people think about batteries, they tend to think of minerals like lithium, cobalt, and nickel. Most people don’t realize that graphite is actually the largest component by mass, making up roughly 20 to 30 percent of any battery.
One reason it gets overlooked is that it’s relatively inexpensive on a per-kilogram basis compared to lithium and rare earths. It doesn’t carry the same headline value, so it doesn’t get the same level of attention, but the market is actually several times larger than all rare earths combined.
The problem is that roughly 97% of battery-grade graphite is currently produced in China. That’s a higher level of concentration than any other battery input, and it adds a massive layer of geopolitical uncertainty into our ability to electrify our economy at scale.
If we’re serious about energy independence, we have to be serious about building a domestic battery industry, and that requires rethinking how we secure battery-grade graphite.
Halo is taking a fundamentally different approach to graphite production. At a high level, what makes your process distinct?
When we think about making domestic graphite cost-competitive, we have to start with what actually drives the current cost structure.
If you peel back the layers of the onion, it’s not really the raw material that drives the cost, it’s what happens in the post-processing phase – things like shaping, purification, coating, and graphitization. Those steps account for more than 80% of the final cost, so we’ve focused on figuring out how to eliminate or simplify these downstream steps.
What makes Halo’s approach unique is that we produce graphite that is already close to the final target material in terms of shape, size, and purity, making subsequent steps less intensive and costly. It’s like buying a new house instead of a fixer-upper that requires a lot more cost and effort to get up to snuff.
We start with natural gas feedstock, which is inherently very pure, and convert it in a thermocatalytic reactor into graphite. This means our technology has a geographic advantage being based in the United States, since we can access inexpensive natural gas here in North America.
As you move from early validation toward deployment, what are the biggest challenges in bringing a new materials technology like this to commercial scale?
There are two main challenges that any materials technology startup faces: scale-up and validation.
Regarding scale-up, there’s always engineering risk going from lab to market. That’s just the nature of building physical infrastructure. One way we manage that at Halo is by not reinventing everything at once. For example, we’re designing around reactor systems that have been optimized over decades and are well understood. We’re not relying on something completely novel where we are the first ones to build operating experience. That gives us a much clearer sense of where things might break and how to address them.
On the validation front, ensuring that the material performs the way our customers expect requires time and rigorous communication. It’s easy to say, “we’ve made graphite,” but that’s not actually the bar. Graphite is a highly engineered material. At the atomic level, it’s all carbon, but how it’s made determines how it performs.
Even if we describe our graphite as a drop-in replacement, battery manufacturers still need to validate it and get comfortable using it in their systems. Our partners and customers are eager to diversify, but this testing requires both time and a willingness to look beyond the status quo. This may be an area where the government can help incentivize the private sector to experiment with new approaches, especially in the realm of critical minerals, which are widely viewed as a national security priority.
If Halo succeeds in delivering domestic, cost-competitive graphite, what does that enable downstream for battery manufacturing, energy security, and the broader economy?
The simple reason hydrocarbons are so central to the U.S. economy is that we have them. With all of the natural gas that we produce, we’re a hydrocarbon superpower.
Right now, that takes the form of producing natural gas and selling it both domestically and on the international market. But what if we could take that natural gas and turn it into something other than fossil fuel? The oil & gas industry would still play a role in powering our economy, but the product would be graphite to power batteries and other advanced energy applications.
Right now, we rely heavily on foreign supply chains for the critical minerals and materials that go into solar, batteries, motors, and more. Many of the minerals and components needed for next‑generation energy technologies simply aren’t produced at scale in the U.S.
Halo’s solution is to take an abundant domestic resource, natural gas, and transform it into graphite that is affordable and readily available for the United States and our partners. This would have a few important benefits. First, we’d insulate our economy from geopolitical risk, since we wouldn’t be dependent on a foreign country for a critical material. Second, we’d make it much easier to build batteries domestically by shoring up supply chains. And third, we’d give the existing energy industry a path forward that involves making hydrocarbons part of the clean energy system rather than just burning them.
The end result is that it becomes much easier for the U.S. to go all-in on electrification and battery storage without introducing new vulnerabilities.
Stepping back, what’s one policy or market design change that would best enable companies like Halo to reach commercial scale faster?
The biggest issue for physical industries trying to reach scale is predictability. Ultimately, we want the United States and our allies to have a thriving manufacturing base for energy technologies of the future, like batteries. If battery companies are going to invest billions of dollars into building new domestic supply chains, they need confidence that the market for their products will be there for the long run.
Right now, there’s a bit of a mismatch. There’s strong policy support for domestic manufacturing, but at the same time, parts of the market have seen a lot of uncertainty, which shows up directly in capital decisions. We sometimes hear from investors who say, “we like the idea of this technology and we see how it would benefit national and energy security, but we’re not sure how viable the domestic battery market is going to be.” So the most important thing policymakers can do is create a stable, predictable environment where people can make long-term bets.
The second barrier is partnerships. A lot of the time, it’s not that the technology doesn’t work, it’s that the path from “this works” to “this is deployed at scale” is too fragmented. There’s often a gap between startups developing new technologies and established companies that know how to build and operate at scale. It is primarily the responsibility of startup founders to secure customers and partners, but if policymakers can facilitate mechanisms to encourage large corporations to work together with startups developing early-stage innovation, perhaps through pilot program funding, that could make a big difference in helping more startups reach scale.
