Environment and Energy
Reports: Federal funding for Cliffs' project could be slashed
Written by Stephanie Ritenbaugh
April 11, 2025
Federal funding aimed at helping steelmakers like Cleveland-Cliffs invest in their plants could be on the chopping block, according to media reports.
Last year, the US Department of Energy awarded up to $1.5 billion in funding to six projects to further decarbonize the iron and steel industry. The funding was part of a larger, $6-billion DOE program funded by the Biden administration’s Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) to support decarbonization in energy-intensive industries.
But that funding could be slashed as Elon Musk’s Department of Government Efficiency (DOGE) determines which grants to advance and which ones to terminate, according to several media outlets, including CNN and the Cincinnati Enquirer.
A DOE spokesperson told SMU that it is “conducting a department-wide review to ensure all activities follow the law and align with the Trump administration’s priorities.”
“The review is ongoing, and speculation by anonymous sources about the results of the review are just that – speculation,” the DOE said.
Cleveland-Cliffs projects
Last year, the DOE selected six projects in the iron and steel sector to move forward with award negotiations: Two at Cleveland-Cliffs’ facilities, and one each at SSAB Americas, Vale USA, American Cast Iron Pipe Co., and United States Pipe and Foundry Co.
Cliffs was awarded two grants of up to $575 million in total from the DOE – $500 million of which would be used to replace the blast furnace at its Middletown Works in Ohio with a direct-reduced iron plant and two electric melting furnaces.
The steelmaker said it would spend $1.3 billion of its own money on the project in the hometown of Vice President JD Vance. The smaller grant of up to $75 million was earmarked to help in production of electrical steels at the Butler Works in western Pennsylvania.
The Cleveland-based company said the project would reduce Middletown’s production costs by ~$150 per short ton of liquid steel, generating annual cost savings of $450 million.
The unofficial DOGE list says both grants awarded to Cleveland-Cliffs will be terminated, according to the media reports.
Cliffs did not return a request for comment.
Other steel projects selected for funding
Under the green energy program, Vale USA was selected for its plan for low-emissions, cold-agglomerated iron ore briquette production on the Gulf Coast with a federal government cost share of up to $282.9 million.
The status of funding for that project is unclear.
SSAB’s project, selected for award negotiations for up to $500 million, would see the construction of a facility to produce iron by using green hydrogen instead of fossil fuels. However, SSAB later quietly pulled out of talks with the federal government for the plant in Mississippi.
Stephanie Ritenbaugh
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