Middletown Works steel plant may get $500M from Biden administration to go green

Cleveland-Cliffs announced Monday its Middletown Works steel production complex is in the running to receive up to $500 million in federal funding to build three new plants to reduce carbon emissions.

The new facilities would replace a blasting furnace on site with three facilities powered by hydrogen and natural gas. The company said if it wins the money now that it has been selected by the Department of Energy for award negotiations, it would spend $1.3 billion on the project, which is expected to create 170 new jobs in the region and preserve 2,500 existing jobs.

The federal grant would be awarded from the energy department’s Industrial Demonstrations Program, which supports decarbonization projects in energy-intensive industries. The program is funded under the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022, both signed into law by President Biden.

Cleveland-Cliffs said in a statement its Middletown site is large enough to build the new facilities near existing ones without interfering with ongoing production of 3 million net tons of raw steel per year. Once constructed, though, it estimated the new facilities could trim $450 million in production costs, maintain quality production and reduce its dependence on scrap metal, which is expected to be in shorter supply in years to come.

The new facilities would reduce Middletown Works’ iron-making carbon intensity by 50% to 90%, the company said. The company said another site, Butler Works in Lyndora, Pennsylvania, about 30 miles north of Pittsburgh, is also in the running for a $75 million grant from the energy department.

Cleveland-Cliffs CEO Lourenco Goncalves credited the company’s successful completion of a hydrogen-ready plant in Toledo for helping secure this latest opportunity.

“Completion of our $1 billion clean hydrogen-ready Toledo DR Plant through the depths of COVID stood as strong evidence of Cliffs’ expertise and resolve to drive down emissions,” Goncalves said in a statement.

U.S. Sen. Sherrod Brown urged the energy department to approve the grants, noting the federal money would support union workers in the state.

“This partnership will ensure that IAM steelworkers in Middletown remain at the forefront of the global steel industry,” Brown, a Cleveland Democrat, said in a statement. “This is why we passed the Bipartisan Infrastructure Law and the Inflation Reduction Act – to ensure Ohio manufacturing continues to lead the world in the technologies that will drive our economy for decades to come.”

News of the possible windfall comes as both Biden and Brown face bruising 2024 re-election bids.

U.S. Secretary of Energy Jennifer Granholm said in a statement the Ohio project was one of 33 projects in 20 states that could get as much as $6 billion to decarbonize energy-intensive industries, such as steel, iron, aluminum, glass, paper and others.

“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,” said Granholm, who was slated to visit the facility Monday.

This article originally appeared on Cincinnati Enquirer: Biden Admin considers $500M grant for Middletown Works steel plant