Carbon capture and storage, one potential path to emissions reduction for energy-intensive industries such as manufacturers, took a major hit this past week when the U.S. Department of Energy terminated 24 previously announced funding awards for cleaner energy projects.
The terminations impacted some $3.7 billion in financial awards, including carbon capture and storage projects involving Calpine Corp., Heidelberg Materials and Exxon Mobil. The CCS project awards pulled back from Calpine included $270 million in funding for carbon capture at power plants in Yuba City, California, and Baytown, Texas.
The DOE announcement quoting Trump DOE Secretary Chris Wright indicated most of the withdrawn funding was for projects approved during the last month of the Biden Administration, primarily election day in early November to the Trump inauguration day on January 20. Sixteen of the affected 24 projects were announced during that transition period, according to DOE.
“While the previous administration failed to conduct a thorough financial review before signing away billions of taxpayer dollars, the Trump administration is doing our due diligence to ensure we are utilizing taxpayer dollars to strengthen our national security, bolster affordable, reliable energy sources and advance projects that generate the highest possible return on investment,” the statement by Secretary Wright reads. “Today, we are acting in the best interest of the American people by cancelling these 24 awards.”
The Trump Administration has been working to dismantle or delay many of the decarbonization projects initiated during Biden’s four-year term. The actions include freezes and re-evaluation of DOE awards and loan guarantees, while the Republican Congress is mulling a new budget bill to financial starve some portions of the decarbonization-friendly Inflation Reduction Act.
One of the projects defunded by DOE was work by Heidelberg Materials to capture carbon dioxide from cement production in Louisiana, eliminating some $500 million awarded earlier. The company gained DOE funding two years ago for a much smaller carbon capture and storage project at its cement plant in Indiana.
Another $375 million award removed was previously granted to a project by Eastman Chemical Co.’s methanolysis facility in Longview, Texas. A statement by Eastman sounded confident that the project would still go forward—at least in some form—even without DOE financial support.
“It is important to note that this second methanolysis facility was planned before government funding was an option for us,” reads the Eastman statement. The DOE award “did allow us to expand the scope to drive further decarbonization and offset significant capital inflation. If we cannot get the grant reinstated, we will evaluate potential changes to the project scope.”
Other companies impacted by the terminated funding include projects led by Orsted, Brimstone Energy, Libbey Glass, Owens-Brockway glass Contained Inc., Kraft Heinz Food Co., National Cement Co. of California, Nippon Dynawave, Kohler and Nevada Gold Mines LLC.
