Trump Administration Redirects $500M Green Steel Grant to Ohio Coal Blast Furnace
Cleveland-Cliffs confirmed on Friday that federal funds earmarked for a gas-and-hydrogen steelmaking transition will instead upgrade a coal blast furnace in Middletown, Ohio.
Cleveland-Cliffs confirmed on Friday (2026-08-21) that the Trump administration has redirected a $500 million Department of Energy grant, originally awarded to decarbonize steelmaking in southern Ohio, toward upgrading a coal-fueled blast furnace at its Middletown facility.4
The Biden administration chose Middletown in March 2024 to announce its $6.3 billion DOE program for decarbonizing U.S. industrial manufacturing, funded primarily through the 2022 Inflation Reduction Act. Cleveland-Cliffs' share of that program was to replace coal with natural gas and, eventually, hydrogen, eliminating an estimated 1 million metric tons of CO2 emissions annually, Canary Media reported. The Middletown project was one of the few U.S. sites where federal funding and a committed industrial operator had been aligned behind a hydrogen steelmaking pathway.4
None of that decarbonization will proceed as designed.4
Cleveland-Cliffs chief executive Lourenco Goncalves telegraphed the change in July, telling investors during an earnings call that the company planned to redirect the $500 million grant to align with the Trump administration's priorities. The formal confirmation came on Friday (2026-08-21). The company also committed $500 million of its own capital to match the DOE funding, bringing the total investment in the upgraded coal furnace to as much as $1 billion.4
Iron and steel production generates roughly 9% of global human-caused CO2 emissions each year, with the bulk of that pollution coming from coal in blast furnaces, Canary Media reported. Upgrading an existing blast furnace preserves that coal dependency rather than cutting it.4
The shift in Middletown fits a broader direction the Trump administration has moved in since taking office. In June (2026-06-04), the White House invoked the Defense Production Act to direct as much as $850 million toward coal projects broadly, E&E News reported. Under a separate $350 million DOE coal-revival program launched in September 2025, the department committed $18.5 million to TerraSpark Energy Campus, a proposed 1.6-gigawatt greenfield coal plant in Grant County, West Virginia, targeting a 2030 startup and a 95-98% carbon capture rate, according to Power magazine.2,3
TerraSpark's grant carries a carbon capture component. The Middletown project does not, at least not as reported. The DOE funding that was designed to bring hydrogen into U.S. heavy industry will instead extend coal-based steelmaking in southwestern Ohio.4
For the hydrogen sector, the practical impact is the removal of a funded, named project with a credible industrial off-taker. Green hydrogen in steelmaking requires exactly that kind of anchor demand to justify investment in electrolyzers and production infrastructure. Middletown represented one of the few near-term U.S. demand signals with both federal money and corporate commitment behind it.4
The $6.3 billion IRA-backed industrial program was structured on the assumption that projects like Middletown would pull hydrogen demand into commercial existence and give electrolyzer developers a viable U.S. market to build toward. That program now has one fewer large-scale test case.4,1
The more immediate signal is whether other Biden-era industrial grant recipients face similar redirection pressure. The DOE's $6.3 billion program has multiple awards outstanding, and the Middletown decision establishes that grant scope can be rewritten when political priorities shift — electrolyzer developers and green hydrogen producers that had counted Middletown as a future customer are now pricing a thinner U.S. demand outlook than they were a week ago.4