Federal ‘uncertainty’ delays start of $1.3B Microporous project in Pittsylvania

Construction on Microporous‘ $1.3 billion lithium-ion battery separator plant at the Southern Virginia Megasite at Berry Hill will be delayed from April until June or July, following uncertainty regarding its federal funding, according to a Pittsylvania County official.

Matt Rowe, Pittsylvania’s economic development director, said Thursday he feels that the Tennessee company’s $1.3 billion investment, which comes with the promise of more than 2,000 jobs for the region, has not been derailed, just postponed.

“The uncertainty that was created at the federal level …  just pushed things back probably two to three months,” Rowe said

Microporous has told Pittsylvania County officials to expect to see work crews mobilizing on the Berry Hill site in June or July, according to Rowe. “It was originally supposed to be in the April time frame,” he said.

Construction on the core and shell of the facility should begin by the end of the year, Rowe added. “That’s fully financed from what’s been stated to us.”

Microporous received the U.S. Department of Energy’s formal approval for a $100 million grant in mid-January.

On his first day back at the White House, President Donald Trump signed an executive order freezing federal grants approved under the 2021 Infrastructure Investment and Jobs Act of 2021 and the 2022 Inflation Reduction Act, including Microporous’ grant.

Numerous lawsuits have been filed over Trump’s pause in funding. On Tuesday, a federal judge issued an injunction blocking the freeze.

There’s also a threat, however, that the pause could turn into something more. In March, E&E News reported that the DOE was working on a “hit list” of federal grants for renewable energy projects that the Trump administration could claw back. Projects that had spent less than 45% of federal awards had to be reviewed, according to the story. Microporous could fall into that category.

Under the terms of Microporous’ grant, which was part of a $275 million group of federal funds awarded under the DOE’s Advanced Energy Manufacturing and Recycling Grant Program under the federal Bipartisan Infrastructure Law, Microporous would submit expenses for reimbursement and receive payments between April 1 and running through March 31, 2028.

U.S. Sen. Mark Warner, Virginia’s senior Democratic senator, said during an April 9 call with journalists that he was concerned about the status of the grant and that he’d spoken that week to Chris Wright, the Secretary for the U.S. Department of Energy, about getting the Microporous grant funding released.

“I got assurances from the secretary of energy that this will get resolved shortly,” he said. “I’m going to stay on it. I know the governor is going to stay on it. We’ve got to get these dollars released because, again, the local community has literally invested millions in getting these sites ready. To have the rug tripped out from under them is wrong. It’s unfair and it’s, frankly, disrespectful to a community that voted over 70% for Donald Trump.”

In a statement on LinkedIn, Microporous said that the grant “began its period of performance on April 1 with regularly scheduled meetings with the grant deployment manager” and the DOE’s Office of Manufacturing and Energy Supply Chains (MESC) team. The company said it had no further comment and did not specify whether it has received any reimbursements or payouts yet from the federal government.

In March, E&E News reported that the federal Department of Energy was working on a “hit list” of federal grants for renewable energy projects that the Trump administration could claw back. That story said that projects that had spent less than 45% of their federal awards had to be reviewed by the federal agency. Warner said April 4 that the Trump administration was “stonewalling” his office while it attempted to find out which projects were on the list.

Warner’s office said Thursday in an email that it was looking into the current status of the Microporous grant.

Meanwhile, Warner has spoken publicly in recent weeks about his concerns that the federal funding freeze could impact financing for projects like Microporous’ Berry Hill facility and the $208 million in federal grants the DOE awarded to Volvo Group for upgrades at its Pulaski County manufacturing plant, as well as its facilities in Maryland and Pennsylvania.

If a company were to lose a large federal grant after already setting up financing, Warner warned during an April 4 interview with Virginia Business, the outcome could be disastrous. “The whole project can fall apart,” he said.

However, Rowe said Thursday that the DOE  is actively working with Microporous on “moving that grant process forward.” He stressed the Pittsylvania project isn’t dependent on the company receiving the $100 million in federal funds. “It just allowed things to move a little bit faster.”

A Florida private equity firm, Trent Capital Partners, purchased full control of Microporous in 2024, which gave the company greater liquidity. “That restructuring occurred really to support this project,” Rowe said.

Another Trump administration policy — the ever-changing tariff war  — could even end up being a boon for Microporous, Rowe speculated.

“The vast majority [of] better battery separators today are coming from China,” he said, and with China’s retaliatory tariffs raising prices, original equipment manufacturers and large battery manufacturers will be looking elsewhere for components — possibly toward Southern Virginia.

“We feel really confident that we’ve tied our our wagon to the winning horse when it comes to battery separators,” Rowe said.