Biden’s $6B bid to clean up heavy industry at risk under Trump

A $6 billion federal initiative to cut carbon emissions from steel mills and cement plants — and even whiskey distilleries and ice cream factories — is at risk of being gutted under the second Trump administration, experts say. 

The Biden administration announced the Industrial Demonstrations Program last year as part of its broader effort to slash planet-warming pollution from the nation’s heavy industrial sectors. The program supports U.S. manufacturers that are working to electrify and decarbonize the giant boilers, furnaces, and factories that produce industrial materials and processed foods.

In March, the U.S. Department of Energy picked 33 projects in more than 20 states to receive tens or hundreds of millions of dollars apiece in cost-sharing grants. The projects will deploy early-stage, commercial-scale technologies that ideally can be replicated and scaled up at industrial facilities nationwide.

To date, however, very little of that funding has actually been distributed or is ​“obligated,” steps that would make it much harder to rescind. Ten projects have entered into the early phases of award negotiations, and they’ve received a fraction of their total grant funding to begin initial planning work. The other 23 projects are still in pre-award negotiations and haven’t inked formal agreements with the department.

Any money that isn’t committed could potentially be pulled back after President-elect Donald Trump takes office next January — putting greater pressure on the Biden administration to advance negotiations with manufacturers in the coming weeks. 

“The program is vulnerable,” said Ryan Fitzpatrick, senior director of domestic policy for the climate and energy program at Third Way, a center-left think tank. ​“We’re going to see the [Biden] DOE continuing to keep up a really brisk pace of announcements and awards,” he added.

The initiative aims to solve for the fact that, while the U.S. often leads the world on research and innovation, many cutting-edge technologies struggle to receive the private-sector investment necessary to become full-scale operations. ​“This is creating a signal for the industry that the technology works, so we can reduce the risk and reduce the cost of financing,” he said.

The industrial sector accounts for nearly one-third of U.S. carbon dioxide emissions every year. For manufacturers, tackling those emissions is a technically complex and expensive endeavor. Many facilities consume extraordinary amounts of heat and steam, at levels that are often difficult to supply with electricity alone. Some processes, like making iron, cement, and aluminum, emit CO₂ just through chemical reactions.

The 33 projects are expected to eliminate a combined 14 million metric tons of CO₂ emissions every year. While that’s less than 1 percent of the country’s total industrial emissions, the program could lead to deeper emissions reductions in the U.S. and worldwide if other companies adopt these new solutions.

“This is a unique opportunity to develop a diverse set of technologies that can allow the U.S. industrial sector to modernize, to become more efficient and competitive, and to export technologies all around the world,” said Christina Theodoridi, who manages the industrial policy team at the Natural Resources Defense Council.

The DOE’s Office of Clean Energy Demonstrations (OCED) is in charge of the Industrial Demonstrations Program, which is funded by the Inflation Reduction Act and bipartisan infrastructure law. The awards represent one of the single-largest decarbonization investments in American history, according to officials.

Whether Trump will go after the program, or to what extent, is hard to predict. 

At the very least, the president-elect and his allies seem poised to scrutinize the funding sources that support such clean energy initiatives. Trump and Vice President-elect JD Vance have called for rescinding unspent funds allocated by the Inflation Reduction Act; both have blasted the climate law as a ​“green new scam.” Project 2025 — a right-wing policy platform written in part by many Trump affiliates — advises the next administration to ​“eliminate all DOE energy demonstration projects, including those in OCED,” in order to avoid ​“distorting the market and undermining energy reliability.”

But the industrial demonstrations initiative is expected to support tens of thousands of jobs and drive billions of dollars in economic development — largely within Republican-held states and traditional manufacturing belts.

“It’s hypocritical of a Trump administration to say you care about domestic manufacturing and then to remove subsidies and support for helping manufacturing,” said Michael Williams, a senior fellow at the progressive think tank Center for American Progress. ​“I think there will need to be a reckoning internally with that cognitive dissonance. I don’t know where they will land.”

Cleveland-Cliffs, for example, could receive up to $500 million from the DOE program to build a first-of-a-kind green steel facility in Vance’s hometown of Middletown, Ohio. Century Aluminum was selected for a $500 million award to build a giant new smelter powered by carbon-free energy, in Kentucky or within the Ohio and Mississippi River basins. Four projects in Texas are aiming to reduce emissions from chemical and plastics refineries. 

“The industries and companies know that they need to be on this technological trajectory if they’re going to have a future” in a low-carbon global economy, said Todd Tucker, who leads the industrial policy and trade program at the Roosevelt Institute, a liberal think tank. 

“They don’t have any interest in seeing those programs go away,” he said, adding that he expects to see ​“quite a lot of continuity” with the heavy industrial projects in the next administration.

The Biden administration has until January 20 to distribute or legally tie up as much of the remaining $6 billion in awards as it can. That doesn’t mean participating companies will suddenly receive full checks. But they could secure the funding needed to lay important groundwork, with future DOE officials being obligated to distribute the remaining dollars so long as projects meet key milestones, Fitzpatrick said. 

Ian Wells, the federal industrial lead at the Natural Resources Defense Council, said he had some ​“cautious optimism” about the long-term success of the Industrial Demonstrations Program. ​“We hope that there’s a real political will to continue this job, and to make sure we have a clean and competitive domestic industrial base,” he said.