Trump Converts $500M Clean Steel Grant into Funding…
TL/DR –
The Ohio-based steelmaker Cliffs was initially planning a project to replace coal with natural gas and eventually hydrogen, eliminating approximately 1 million tons of emissions. However, under President Trump’s administration, the company pivoted back to coal and now plans to invest $500 million, matched by a DOE grant, to refurbish its 73-year-old blast furnace, potentially for another two decades. Cliffs will also install a cogeneration plant using waste gases from the furnace to generate steam and electricity for the steel mill’s operations, even though a former DOE official noted this moves the steel mill away from achieving net-zero emissions.
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Cliffs Abandons Green Energy Plans for Middletown Steel Mill
In a turn away from previous plans to reduce emissions, Ohio-based steel manufacturer Cliffs has shifted its energy strategy for the Middletown steel mill. Instead of replacing coal with natural gas and eventually hydrogen to eliminate approximately 1 million tons of greenhouse gas emissions, the company has decided to continue its use of coal in its operations. This decision came after the inauguration of President Donald Trump in 2025 who has shown preference for the use of “beautiful coal”.
Revamping Existing Infrastructure
Cliffs has revealed plans to overhaul the 73-year-old blast furnace at the mill to potentially extend its operation for another 20 years. In addition to this, the steelmaker intends to set up a cogeneration plant. This plant will utilize waste gases from the blast furnace to generate steam and electricity necessary for the mill’s operations. The company plans to invest $500 million of its own funds to match the grant provided by the Department of Energy (DOE).
Changing Course
The company initially presented this new approach in a February air-permit application submitted to Ohio’s environmental regulatory body. It was not immediately clear whether this proposed work would be funded by the DOE, considering the nature of the grant program. However, CEO Lourenco Goncalves confirmed in a July earnings call that the company aimed to redirect the $500 million grant to align with the Trump administration’s priorities. This intention was solidified with Friday’s announcement, wherein the DOE has set up a framework for Cliffs to finalize negotiations and implementation plans for the Middletown project.
A Shift in Priorities
In a recent press release, the DOE stated that Cliffs decided that the original project scope was no longer financially feasible due to customers’ unwillingness to pay a ‘green premium’ for steel. In collaboration with the DOE, Cliffs found an alternative that would upgrade and improve the efficiency of its existing coal-fired blast furnace while also capturing waste gas.
Controversial Reallocation of Funds
A former DOE official pointed out that the Inflation Reduction Act legally mandated the grant funding to enable “advanced industrial technology”, which is defined as technology that would “accelerate greenhouse gas emission reduction progress to net-zero at an eligible facility”. The revised direction of the Middletown project will shift the steel mill further from achieving net-zero emissions, not closer to it, according to this former official.
Cliffs’ Defense
Despite these claims, Cliffs maintains that it is exceeding the expectations for a standard blast furnace reline by including the most advanced technology available. Goncalves mentioned in a recent statement that the company is investing decisively in the future of American steelmaking and manufacturing, referring to the cogeneration plant and other planned energy-efficiency improvements.
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