Steel Mills

Iron, steel win big in Dept. of Energy’s $6B decarb initiative

Written by Laura Miller

The Department of Energy (DOE) announced on Monday six projects that will receive up to $1.5 billion in funding to further decarbonize the iron and steel industry.

The projects are part of a larger, $6-billion DOE agenda funded by the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) to support decarbonization in energy-intensive industries. The monies are to be awarded to 33 projects across several industries. In addition to iron and steel, those industries include chemicals and refining, cement and concrete, aluminum and metals, food and beverage, glass, process heat, and pulp and paper.

DOE selected six projects in the iron and steel sector to move forward with award negotiations: Two at Cleveland-Cliffs Inc. facilities, and one each at SSAB Americas, Vale USA, AMERICAN Cast Iron Pipe Co., and United States Pipe and Foundry Co.

“Selection for award negotiations is not a commitment by DOE to issue an award or provide funding. Before funding is issued, DOE and the selected applicants will undergo a negotiation process, and DOE may cancel negotiations and rescind the selection for any reason during that time,” DOE noted in a statement.

Secretary of Energy Jennifer M. Granholm announced the funding awards while visiting Cliffs’ Middletown plant.

“Thanks to President Biden’s industrial strategy, DOE is making the largest investment in industrial decarbonization in the history of the United States. These investments will slash emissions from these difficult-to-decarbonize sectors and ensure American businesses and American workers remain at the forefront of the global economy,” Granholm said.

“Spurring on the next generation of decarbonization technologies in key industries like steel, paper, concrete, and glass will keep America the most competitive nation on Earth,” she added.

DOE did not respond to an SMU request for more information on the awards negotiations process.

Decarb awards for iron and steel

Two projects at Cleveland-Cliffs were selected for award negotiations for up to $575 million. With $500 million in DOE funding, Cliffs plans to replace the blast furnace at its Middletown Works in Ohio with direct-reduced iron (DRI) and electric melting furnace (EMF) technology. Another DOE grant of up to $75 million, if awarded, would upgrade and replace slab reheat furnaces at Cliffs’ Butler Works in Pennsylvania.

SSAB’s project, selected for award negotiations for up to $500 million, would see the construction of a HYBRIT manufacturing facility to produce fossil-free iron by using green hydrogen instead of fossil fuels.

Vale USA is planning for low-emissions, cold-agglomerated iron ore briquette production somewhere on the Gulf Coast with a federal government cost share of up to $282.9 million.

Industry applauds awards

Industry associations and unions responded favorably to news of the investment initiatives.

“We welcome investment in the decarbonization of heavy industry,” Philip K. Bell, president of the Steel Manufacturers Association (SMA), said in a statement to SMU.

“SSAB Americas and its fellow SMA members have led the effort to decarbonize the steel industry for decades, and they have invested billions of dollars of their own capital to help make the American steel industry the envy of the world,” Bell added.

The American Iron and Steel Institute (AISI) also applauded the DOE’s industrial decarbonization initiative.

“We are proud that AISI members Cleveland-Cliffs and SSAB Americas were selected today to partner with DOE to continue leading the way with revolutionary technologies,” Washington-based AISI said in a statement on Monday.

“The American steel industry, and the manufacturing sector as a whole, have made significant investments in cleaner and more sustainable production processes. We look forward to working with the administration to implement these and other significant initiatives, enabled by the Bipartisan Infrastructure Law and the Inflation Reduction Act, to strengthen the production and use of clean American steel,” AISI added.

The United Steelworkers (USW) union also supported the announcement of carbon-reducing projects across a handful of critical industries.

“The USW is excited that the Biden administration is making these forward-thinking, transformative investments in our nation’s manufacturing future, and doing so in a way that puts workers, families, and communities first,” the union said in a statement.

“These investments will allow companies to make needed upgrades and reduce pollution while also helping our manufacturing base compete globally,” it added.

Laura Miller

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