Trump Refashions $500M Grant
A $500 million grant for clean steel has been repurposed for a coal furnace upgrade
The Trump administration has refashioned a $500 million Biden-era grant to decarbonize steelmaking into funding for upgrading a coal-fueled blast furnace in southern Ohio. Cleveland-Cliffs confirmed that the U.S. Department of Energy had changed the scope of the previously awarded funding for Cliffs’ Middletown steel mill.
Background
The Middletown plant makes steel used in the exposed parts of cars, trucks, and SUVs. According to Cliffs CEO Lourenco Goncalves, the DOE’s support for this project is a testament to the importance of preserving the blast furnace route to produce automotive-exposed grade steels in the U.S.
Original Plans
Cliffs initially planned to use its half-billion-dollar award to replace its aging blast furnace with cleaner, hydrogen-ready technology and electric furnaces. This project would have replaced coal with natural gas - and eventually hydrogen - eliminating roughly 1 million tons of planet-warming emissions.
Revised Plans
Under its current plan, Cliffs says it will refurbish and optimize the 73-year-old blast furnace so that it can run for potentially another two decades. The manufacturer will also install a cogeneration plant that uses waste gases from the blast furnace to generate steam and electricity for the steel mill’s operations. Cliffs said it will invest $500 million of its own money to match DOE’s grant. The following table compares the original and revised plans:
| Category | Original Plan | Revised Plan |
|---|---|---|
| Fuel | Natural gas, eventually hydrogen | Coal |
| Emissions Reduction | 1 million tons | Not applicable |
| Technology | Hydrogen-ready technology, electric furnaces | Cogeneration plant, blast furnace optimization |
| Investment | $500 million grant | $500 million grant, $500 million Cliffs investment |
The change of plans has drawn pushback from green-steel advocates and some Middletown residents, who say they are dismayed that funding meant to slash industrial emissions could potentially amp up local air pollution instead. A former DOE official noted that Congress legally mandated that the grant funding be used to enable “advanced industrial technology” - defined as something “designed to accelerate greenhouse gas emission reduction progress to net-zero at an eligible facility.” The Middletown project’s revised scope will move the steel mill away from achieving net-zero emissions, not toward it, the former official said. According to Canary Media, Cliffs is “going above and beyond a standard blast furnace reline, to include the most advanced technology available,” Goncalves said in Friday’s statement, referring to the cogeneration plant and other planned energy-efficiency improvements. The steelmaker is making a decisive investment in the future of American steelmaking and manufacturing, he said. The project will now focus on upgrading the existing coal-fired blast furnace, rather than replacing it with cleaner technology.
