US heavy industries to get billions in decarbonization grants

The Biden administration is poised to award as much as $6.3 billion in dozens of grants to help hard-to-decarbonize industries cut emissions, according to people familiar with the matter. 

Details on the projects that have received funding are expected to be announced as soon as Monday, said the people, who asked not to be named as the information hasn’t been made public yet. The grants will be spread across sectors such as cement, glass, chemicals, metals, and pulp and paper, they said.

The money will be aimed at industries that account for nearly a quarter of US emissions, but are challenging and expensive to shift to lower-carbon technologies. Cleaning up these sectors will be critical if the White House wants to achieve its goal of cutting greenhouse gas emissions 50% by 2030 and achieving net zero by mid-century.

The Department of Energy, which is awarding the funding, had previously encouraged companies to file full applications for more than 100 proposals.

Among those, Cleveland-Cliffs Inc. is proposing to make steel using hydrogen, as well as another project to expand production of the metal for electrical transformers and electric vehicle motors at its Butler Works plant north of Pittsburgh, according to one of the people. Century Aluminum Co., based in Chicago, was encouraged to proceed on at least two different proposals, including construction of the first primary smelter for the energy-intensive metal in the US in decades, the person said.

The Energy Department and the two companies didn’t respond to requests for comment.

Almost $5.5 billion of the money for the grants will come from President Joe Biden’s signature climate law, the Inflation Reduction Act. The Energy Department, which announced the funding last March, said at the time it would be used to “drastically reduce industrial emissions” and demonstrate first-of-a-kind or early-stage decarbonization technologies that had previously seemed decades away. 

“We hear every day about industrial companies that are interested in decarbonizing their plants, but the initial costs can be daunting,” said Nora Esram, a senior director for research with the American Council for an Energy-Efficient Economy, a Washington-based nonprofit. “The federal funds are geared to enable them to invest in new technologies to cut emissions while supporting community development.”