US DOE allocates USD 6bn to industry decarbonisation projects

The US Department of Energy (DOE) on Monday announced up to USD 6 billion (EUR 5.5bn) in funding for 33 projects to decarbonise energy-intensive industries in what it described as the largest investment in industrial decarbonisation in American history.

“Spurring on the next generation of decarbonisation technologies in key industries like steel, paper, concrete, and glass will keep America the most competitive nation on Earth,” stated US Secretary of Energy Jennifer Granholm.

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Representing more than USD 20 billion in combined federal and private funding, the projects are expected to cut carbon emissions by an average of 77% by leveraging different solutions such as energy efficiency, electrification and alternative fuels like clean hydrogen.

The 33 projects have been selected for award negotiations. They include seven chemicals and refining projects, six cement and concrete projects, six iron and steel projects, five aluminum and metals projects, three food and beverage projects, three glass projects, two process heat-focused projects, and one pulp and paper project. The projects are set to receive USD 489 million from the Bipartisan Infrastructure Law and USD 5.47 billion from the Inflation Reduction Act. DOE put the overall sum of USD 6 billion up for grabs in March 2023.

In the iron and steel sector, for instance, two hydrogen-related projects are poised to receive up to USD 500 million of federal investment each.

A project led by SSAB seeks to build a commercial-scale facility using a fossil-free direct reduced iron (DRI) technology with 100% hydrogen in Perry County, Mississippi. The project will aslo expand SSAB’s Montpelier, Iowa steelmaking facility to use the resulting hydrogen-reduced DRI. SSAB has signed a letter of intent for Hy Stor Energy to supply green hydrogen and renewable electricity to the DRI facility.

In Ohio, Cleveland-Cliffs Steel Corporation leads a project that plans to install a hydrogen-ready flex-fuel DRI plant and two electric melting furnaces at Cleveland-Cliffs' Middletown Works mill.

The list of projects also includes the Green Aluminum Smelter project, led by Century Aluminum Company. This project aims to build the first new US primary aluminum smelter in 45 years, featuring energy-efficient design and the use of carbon-free energy.

Among the selected projects is also a scheme led by a US subsidiary of Danish clean energy group Ørsted A/S. The project, slated for an award of up to USD 100 million, is called Star e-Methanol and is located in the Texas Gulf Coast. It plans to use captured carbon dioxide from a local industrial facility to produce e-methanol to help decarbonise hard-to-electrify sectors like shipping. Ørsted’s facility is expected to produce up to 300,000 tonnes of e-methanol per year.

(USD 1 = EUR 0.924)